China may reduce PV, wind tariffs through 2020 — report

The Chinese government may slash the feed-in tariff (FIT) rates it offers to solar and wind developers over the next five years, according to local media reports.

The National Development and Reform Commission (NDRC) is considering cutting its tariff rates for solar projects by between 2% and 4% per year through 2020, the Yicai newspaper reports.

The planning body may also reduce its tariff rates for wind projects by 0.02 yuan to 0.03 yuan/kwh at the end of 2016.

The NDRC’s current FIT for utility-scale solar projects ranges between 0.9 yuan and 1 yuan ($0.16)/kWh, depending on the solar resources that are available at the point of construction.

Meanwhile, developers of distributed-generation PV projects can sell electricity to the grid at a rate of 0.9-1 yuan/kWh (on top of the local wholesale coal-fired benchmark price of 0.35-0.45 yuan/kWh), or opt for a rate of 0.42 yuan/kWh for electricity used at the point of generation.

The NDRC already plans to cut its onshore FIT from January 2016 by 0.02 yuan to 0.49 yuan/kWh in northern China, 0.52 yuan/kWh in the northwestern part of the country and 0.56 yuan in the northeast.

For offshore projects, it currently offers rates of 0.85 yuan ($0.13) per kWh for near-shore installations and 0.75 yuan for intertidal wind farms.

However, developers say that the offshore FIT rates are not high enough to encourage significant development.

By the end of September, China’s total installed PV capacity had hit roughly 38GW, while its accumulated wind capacity stood at approximately 109GW, according to statistics from the National Energy Administration (NEA), an entity under the NDRC.