Tariffs Cuts to be Done on Solar and Wind Power Generators
China is planning to cut payments on wind and solar electricity generators for its contribution of power to the grid after the State Planning commission reflected recent decline on operating costs. In 2016, on grid tariffs for solar producers will be 0.02 to 0.10 yuan lower per kilowatt-hour as higher cuts will apply in the less populated western region. Tariffs for wind powered generators decrease by 0.02 to 0.03 yuan.
The cuts were expected and is inline with the 0.03 yuan cut to on grids tariffs for thermal power as coal still fires more than 70 percent of china’s power generation. This will be on the positive side for rooftop solar, as the biggest impact will fall on utility scale developers that have built solar farms in the western side of the country. The cost of installing solar panels is still set to fall in 2016 and these cuts are not enough to push a company into the red. Since China is trying to reduce their dependence on fossil fuels, which contributes to the smog, local governments have been increasing subsidies in which solar producers came to rely on especially in the eastern part of China wherein solar power struggled to take off.
Beijing added a local subsidy for distributed solar including rooftop and other small installation under 20 megawatts while Hebei Province the biggest steel producing region and heavy coal user added a solar power earlier this month and shanghai instituted a loan program for distributed solar power this month. Although China failed to meet its ambitious target for solar power use last year, it redoubled its efforts this year and called for a 32.1 gigawatts new solar farm capacity to be installed which is less than half was installed by September. Wind power capacity also reached 113.3 gigawatts by November up from 95.8 gigawatts last year but in the first half if 2015 around 15.2 percent of the power generated was wasted.