January 4, 2017

China to Cut Solar, Wind Power Prices as Project Costs Fall

China is reducing the amount of money it pays to newly completed solar and wind power generators for their electricity, in order to reflect declines in construction costs, the country’s price regulator and economic planner said Monday.

The nation will cut tariffs paid to solar farms by as much as 19 percent in 2017 from this year’s levels, and by as much as 15 percent for wind mills in 2018 from current prices, according to a statement posted on the National Development and Reform Commission’s website. The changes will help reduce subsidies paid to new photovoltaic and wind power projects by about 6 billion yuan ($863 million) annually, the NDRC said.


The move comes as average solar panel prices have tumbled about 30 percent this year, according to data from Bloomberg New Energy Finance, resulting in a lowering of the bids that solar developers offer to build projects. Prices of wind turbines also fell in 2016, according to London-based BNEF.

China will also encourage local authorities to continue making use of auctions to select renewable energy developers, in order to further lower power prices, according to the NDRC.

Reductions to renewable power prices will be smallest in regions in China that have the calmest wind and the weakest solar radiation, according to the NDRC. These areas are also where people or industries make use of more electricity, it said.


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