China to halt subsidies for massive solar projects

Will instead promote smaller solar projects in areas with power shortages.

China is expected to restructure its subsidies to favor smaller projects over larger ones to promote new plants in areas with power shortages. A separate subsidy based on power production will be extended to low-voltage plants that don’t typically supply utilities while a new policy may abolish one-time subsidies.

This means incentives under the “Golden Sun” program will cease even as China urges developers to produce more photovoltaic devices. The government gave subsidies to hundreds of developers last year, including Yingli Green Energy Holding Company and Trina Solar Ltd. Demand for their solar devices, however, plummeted in Europe.

Even with solar subsidies, which began in 2009, profit margins of Chinese PV makers have taken a huge hit after the PV sector built too much factory capacity in the past two years.