BEIJING (Reuters) - China will cut its renewable power subsidy to 5.67 billion yuan ($806.50 million) in 2020 from 8.1 billion yuan in 2019, the Ministry of Finance said on Wednesday, as the country will soon stop funding large solar power stations.
Because of a decline in manufacturing costs, China has been scaling back the amount of subsidies to renewable power providers, who are expected to compete with coal-fired utilities and achieve “grid price parity”.
The subsidy for 2020 will be allocated to wind farms, biomass power generators and distributed solar power operators, as well as solar power projects for poverty alleviation purposes, in 11 regions across the country, according to the finance ministry.
Total subsidies for solar projects are set at 2.63 billion yuan, while wind farms will receive 2.97 billion yuan and biomass generators will get 73.39 million yuan.
The amount of new installed solar capacity was 16 gigawatts (GW) in the first three quarters of this year, the National Environmental Administration has reported.
New solar installations in 2019 will be as much as 25 GW, down from 41 GW last year, due to easing subsidies on centralised solar projects, an industry executive said in September.
China also plans to end subsidies for new onshore wind power projects at the start of 2021.
Surging renewable power capacity in the recent years has left the finance ministry with a subsidy payment backlog of at least 120 billion yuan and endangered the cash flow of renewable power operators.
Reporting by Muyu Xu and Dominique Patton; Editing by Christian Schmollinger