North Coast Solar Stocks

June 3, 2009

China to Encourage Solar Use

Filed under: none — Tags: , , , , — Jason @ 9:00 am

Preferential Tariff Makes Clean Energy More Competitive

NANTONG, China — China said it will introduce a preferential tariff it will pay energy companies that use solar power for their generating capacity, as part of the government’s push for greater use of clean technology.

The preferential tariff — the price that China’s two state-owned electricity transmission and distribution companies will pay energy companies for their solar power — aims to make solar power competitive against traditional fuels, such as coal, which accounts for two-thirds of China’s electricity.

Shi Lishan, vice director of the National Energy Administration’s Renewable Energy Department, said the tariff will be 1.09 yuan (16 U.S. cents) per kilowatt hour for solar power that is supplied to the grid. Coal-fired power generation needs a tariff of just 0.3 yuan per kWh to be profitable.

China, which has overtaken the U.S. as the world’s biggest emitter of greenhouse gases, wants renewable energy to account for 15% of its energy mix by 2020.

While some alternative energy sources — such as renewable plant biomass power — are taking time to gain traction, solar power is poised to exceed targets for installed generating capacity by 2020.

Government officials said earlier that China will likely have 10 gigawatts to 20 gigawatts of solar-power capacity by 2020, up from a previous target of 1.8 gigawatts. Installed solar-power generating capacity at the end of 2008 was less than 0.1 gigawatt.

Only 2% of China’s solar-power output last year was used inside China due to the absence of clear solar-power policies. Lengthy approval processes for new projects are also hampering domestic demand.

Globally, installed global solar-power generation capacity grew to at least 5.5 gigawatts in 2008, from 2.4 gigawatts in 2007, with Spain ranking first, followed by Germany, said the European Photovoltaic Industry Association in March. Spanish and German solar investors are guaranteed favorable feed-in tariffs for more than 20 years.

Mr. Shi said China will also likely have 30 gigawatts of installed wind-power capacity by the end of 2010. This compares with previous estimates by industry and government officials of 20 gigawatts, while the official target stands at 10 gigawatts.

However, Mr. Shi damped speculation that China will introduce more preferential policies for producers of wind energy in a stimulus plan under discussion by the government.
—Jing Yang


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