Government to Offer Tax Breaks to Manufacturers of Solar Power Products
The Ministry of Finance will be offering tax breaks to manufacturers of solar power products as the country is supporting the industry which is struggling to cope up with massive overcapacity and a weak demand.
The ministry said on its website that producers of any solar powered products will be getting refunds of 50 percent of value added taxes. The National Development and Reform Commission have been providing these subsidies to some solar power stations since August. A report also showed that the country bloated solar power industry is facing a grim outlook as companies are deep in debt. Data from the China Renewable Energy Society’s top ten solar panel makers are now 100 billion yuan in debt with a ratio of debt to asset above 70 percent on average.
The government now seeks to consolidate the industry, but it still being protected by central and local levels and the latter is so strong due to the fact that solar power companies are major employers. Several companies have already defaulted its bond payment and still failed to meet payments in August.