China reportedly ready to end large scale PV subsidies this year

Reuters has reported the Chinese Ministry of Finance has confirmed no subsidies will be made available for large scale solar projects next year.

A report published on the news wire yesterday claimed ministry officials had said the RMB3 billion ($427 million) subsidy pile set aside for solar this year will be cut to RMB2.63 billion next year, and will only be available to small scale and poverty alleviation projects.

If accurate, that would mark a significant step back from the 18-month transition period envisaged for the switch to grid parity solar in the consultation draft of the Work plan for the construction of subsidized (grid parity) projects for wind and solar PV document which emerged from talks between renewables industry insiders and government officials in Beijing in April.

Under the terms of that document, China would continue to operate a hybrid system until the end of next year which would prioritize projects free of central government subsidy while offering reverse bidding auction-set subsidies for projects unable to operate without financial assistance.

Reuters reported most of the RMB5.67 billion budget for renewables subsidies next year would go instead to wind and biomass projects with the government sitting on an unpaid subsidy bill of “at least RMB120 billion”, according to the wire report.