On May 28th, the National Energy Agency published the official tendering policy for wind and solar PV. Tendering to determine subsidy amounts serves to ensure that subsidies are only as high as necessary to enable a specific project, thus increasing overall efficiency of the subsidy system and incentivizing technology cost decreases. Lower costs support the energy transition and thus climate change mitigation. The new solar PV tendering mechanism consists of three parts:
• The government will determine the amount of subsidized PV projects based on electricity renewable surcharge revenue instead of planned installations. Authorities will set a subsidy cap based on the estimated amount of surcharge revenue, which reduces the risk of insufficient funding to cover feed-in tariff subsidy payments.
• Tendering applies to most utility-scale PV projects, prioritizing regions that will achieve subsidy-free projects. This increases the efficiency of remaining subsidies and accelerates the phase-out of subsidies.
• The policy will provide stronger support for household PV. A total of RMB 0.75 billion in subsidies, roughly sufficient to subsidize hundreds-mega-watt above 3.5 GW of installed capacity, is open for both new and existing household PV that has not been involved in bidding.
The China National Renewable Energy Center expects a PV capacity of about 40 GW to be installed in 2019. Read more in EN