By Mark Halper
Posting in Energy
Is the global playing field leveling out?
This should please those in the West who complain that enormous Communist Party subsidies enable Chinese solar manufacturers to export to the U.S. and Europe at below market rates: Beijing has slashed its financial support for solar.
Well, at least for a portion of the industry.
Bloomberg is reporting a 21 percent reduction in the so-called Golden Sun program, which funds solar power generation projects. The government has cut subsidies to 5.5 yuan (87 cents) per watt from 7 yuan, Bloomberg states.
The reason given: Prices of solar components have plunged, so the subsidies are not as necessary as they used to be to encourage project developers like GCL-Poly Energy Holdings and Yingli Green Energy Holding Co. to build solar power plants.
That's exactly how some people would say subsidies should work: Government assistance helps a fledgling technology take flight, and starts to back out once the technology is airborne. It's what's been happening in Germany, for instance, where the government has been paring back a decade old Feed-in-Tariff scheme as solar power grows.
But there's a disingenuosness at play here too. The article does not report that China is cutting its multi-handed forms of assistance to solar panel manufacturers, which has helped feed the price decline in the first place! Those include land give-aways and, effectively, lax environmental controls, among other handouts. They continue, as far as I can tell.
And let's not forget that a rotten global economy has helped feed a glut of solar gear that has also pushed prices down.
Still, it all points in the direction that solar power is increasingly standing on its own economic feet, even in China. It has many big steps remaining.
Photo from GCL Poly website.
More sun from China on SmartPlanet:
- Top Chinese solar company plans huge expansion
- Up on the roof: 500 megawatts of solar in China. That's a big roof.
- China to build nuclear scale solar plant
- The dirty side of solar
- China leads the world in renewables, UN says
- If China leads the world in clean tech, why are people dying?
And don't forget China's nuclear ambitions:
May 2, 2012
And will continue. Governmental solar subsidies don't last forever; witness the situation in European nations.
Yes, I agree, the Chinese are making some cuts while still controlling the marketplace to get some positive PR... You can be sure that they will do everything they can to undercut any supplier on all large projects World-Wide! The SIMPLE solution IMO is to require ever longer guarantees for ALL solar panels that are installed, that way those that make higher quality panels (say with a 50 year guarantee) can compete against lower cost panels with shorter lifetimes... This would benefit everyone and help US get Solarized!
This is just a tiny pull back of subsidies when you look at the big picture. It will be interesting to watch this situation develop.