March 23, 2009

Beijing, China: Ministry of Finance Introduces PV Subsidy Program

Today, the Chinese Ministry of Finance introduced interim measures for subsidies for "solar photovoltaic building applications" in China.

A fixed subsidy will be granted for both urban BIPV applications and for photovoltaic building systems in rural and remote areas. Technical standards will apply to their installation. The installed capacity for individual projects should not be less than 50 kWp.

PV systems must include at least 16% efficiency for monocrystalline silicon photovoltaic products, at least 14% efficiency for multicrystalline silicon photovoltaic products, and at least 6% efficiency for amorphous silicon photovoltaic products.

Priority will be given to panels used as architectural components and integrated with grid connected buildings, most notably for schools, hospitals, government agencies and other public buildings.

In order to encourage regional localities to formulate and implement financial policies to support the development of solar photovoltaics, projects in localities that satisfy the following conditions will receive priority support:

            (1) The implementation of "price-sharing" policies;
            (2) The provision of financial subsidies and other incentive policies;
            (3) The formulation of relevant technical standards and regulations, as well as construction methods and diagrams.

Projects already completed will not be eligible for the subsidy.

The standard subsidy for 2009 will, in principle, be set at RMB 20/Wp. The exact amount will be determined by factors such as the degree of integration with the building architecture, as well as the level of technical sophistication of the photovoltaic products.

The Ministry of Finance will first allocate 70% of the total subsidy to the provincial level finance and construction departments, who will then provide the funds to the project owner. After receiving a satisfactory assessment report of the completed project, the Ministry of Finance will disburse the remaining subsidy funds to the project caretaker via local finance and construction departments.

In subsequent years, the subsidy will be adjusted, as appropriate, dependent on how the market develops.

Those applying for the subsidy should provide the following materials:

            (1) Approved project registration documents
            (2) Technical plans for the solar photovoltaic building application
            (3) The signed contract between the manufacturer of the solar photovoltaic products and the project owner/owners

Provincial level Finance and Construction Departments will collect and verify application materials for those applying for the subsidy, and submit a consolidated report to the Ministry of Finance and the Ministry of Housing and Urban-Rural Development before April 30 and August 30 each year.

Today's announcement does not specify the total funding budget for the program.