No More Subsidies for New PV In China

• NDRC releases a policy document related to 2021 solar and wind on-grid tariffs
• New solar power stations, onshore wind projects, or distributed solar projects by commercial users will receive no subsidies from the central government anymore
• The on-grid electricity price for new projects in 2021 will be implemented at the local benchmark price for coal-fired power generation
• The on-grid tariffs for newly approved (recorded) offshore wind power projects and solar thermal power generation projects will be set by the local provincial-level pricing authorities

The National Development and Reform Commission of the People's Republic of China (NDRC) has released a policy document related to 2021 solar and wind on-grid tariffs. This announcement comes after the Commission had solicited opinions regarding the tariff in April. This policy, which will now come into effect from 1 August 2021, focuses on four main points:

1. There will be no subsidies from the Central government for new solar power stations, onshore wind projects, or distributed solar projects by commercial users anymore
2. The on-grid electricity price for new projects in 2021 will be implemented in accordance with the local benchmark price for coal-fired power generation. New projects can voluntarily participate in market-oriented transactions to form on-grid electricity prices to better reflect the green power value of photovoltaic power generation and wind power
3. As of 2021, on-grid tariffs for newly approved offshore wind power projects and solar thermal power generation projects will be set by the local provincial-level pricing authorities. Qualified projects can be formed through competitive allocation.  For those on-grid tariffs that are higher than the local benchmark for coal-fired power generation, the part within the benchmark price shall be settled by the grid operator.
4. Encourage local governments to introduce support policies to support sustainable and healthy development of new energy industries such as PV power generation, onshore wind power, offshore wind power, and solar thermal power generation

According to Roth Capital, "Under the new rules, most investors across China can expect project yields to reach 'relatively good levels', and investors with well situated projects can expect 'better returns'." And indeed, immediate reactions on the Chinese stock market were positive on the news. China's Sina.Finance website summarized comments on the news, pointing out that solar PV stocks in China rose against the trend on the day of the announcement – while  98 PV stocks rose sharply, 19 rose more than 5%.