China will roll back clean energy subsidies after boom
China's top economic planner said on Sunday that it is taking steps to reduce subsidies for renewable energy after an explosion in solar and wind installations.
China has surpassed its own record for solar installations by 45% in 2024. China has installed more than 6 times as much solar power in China today, according to the International Renewable Energy Agency.
China's rapid installation of clean energy has allowed it to reach its 2030 goal six years earlier than expected. This is a testament to the country's speedy rollout of this technology at a moment when Donald Trump pulled the United States from the Paris Climate Deal for the second time, and promised to make drilling for oil and natural gas easier.
China's National Development and Reform Commission, along with China's Energy Administration, announced that they had made "market-oriented changes" to policies to encourage clean energy.
The NDRC reported that China's clean-energy capacity had reached 40% of its total energy production capacity. This was partly due to a system which guaranteed prices for renewable energies sold into the grid.
The NDRC released a statement that said, "The cost of developing new energy has decreased significantly compared with earlier stages."
According to the agency, any new projects completed by June of this year will be subject to "market-based bids" for payments on electricity.
After the changes, the NDRC expects that residential and agricultural users will not see any change in their power costs. Industrial and commercial users should also experience "basically" the same prices.
The NDRC stated that it would collaborate with local governments in China to implement the plan. The NDRC did not give any details about the pricing formula that it would implement.
The Chinese solar industry could be put under pressure if subsidies are reduced for new solar farms. Overcapacity in relation to demand globally has caused prices to plummet and threatens to push smaller producers to bankruptcy. Reporting by Kevin Krolicki, Liangping Gao and Jacqueline Wong.
(source: Reuters)
