China to subsidize PV power units

China announced policies on Friday to ramp up support for renewable energy projects, in a bid to curb air pollution.

The National Development and Reform Commission issued new subsidy standards for distributed solar power generation projects, stipulating a 0.42 yuan (7 cents) subsidy for every kilowatt-hour of electricity produced by distributed photovoltaic, or PV, power units.

The policy is the country's first of its kind.

Distributed PV power units were previously subsidized on a project-investment basis. The new standards will cover units that were not included in the previous policy.

The government will also lower the price of the power generated by some PV stations. In some solar-rich western regions, the price will be lowered to 0.9 yuan or 0.95 yuan per kWh, from the previous national standard of 1 yuan per kWh.

The policy will be applied to projects registered after Sept 1, or registered before that date but that will be put in use after the beginning of next year. The subsidy commitment will last at least 20 years, the NDRC said.

The price of the power generated by PV stations in eastern regions will be kept at 1 yuan per kWh.

"These policies will be a boost to China's PV industry. We hope that companies will be encouraged to scale up their products' standards," said Li Caihua, an official with the NDRC.

China's PV industry has long been strained by the anti-dumping policies of the European Union, which is a major market for solar panel manufacturers.

The government also boosted support for power plants that install equipment to limit air pollutants. Coal-based power plants are a major contributor to China's air pollution.

Power plants that install equipment to remove nitrogen oxide - a major air pollutant - will receive a subsidy of 0.01 yuan per kWh of electricity they produce starting from Sept 25, up from 0.008 yuan previously. And plants that produce power under a certain particle-emission standard will also receive a subsidy of 0.002 yuan per kWh.