China Floats Talk of Solar Tariff

For a country that was one of the world’s largest producers of solar power in 2007—some sourceseven award it second place, after Germany—China’s actual solarinstallation record is far less impressive. Thanks to the cheapness andavailability of traditional fossil fuels like coal, as well as the lackof clearly-defined solar PV policies,last year only two percent of the country’s solar-power output was useddomestically. Considering its estimated continental solar powerpotential of 1,680 billion toe (or, 19,536,000 TWh) peryear, this seems like a bit of a waste, doesn’t it? The Chinesegovernment, a bureaucracy among bureaucracies, appears to have finallyresolved to put the country’s rapidly expanding production capacitiesto use at home and taken a firm hand in guiding itself toward meetingits goal of having renewable energy account for 15 percent of itsenergy mix by 2020. According to the Wall Street Journal,it has announced that it will introduce a preferential tariff that willpay energy companies that use solar power for their generating capacity.

From the WSJ:

The preferential tariff — the price that China’s twostate-owned electricity transmission and distribution companies willpay energy companies for their solar power — aims to make solar powercompetitive against traditional fuels, such as coal, which accounts fortwo-thirds of China’s electricity.

Shi Lishan, vice director of the National Energy Administration’sRenewable Energy Department, said the tariff will be 1.09 yuan (16 U.S.cents) per kilowatt hour for solar power that is supplied to the grid.Coal-fired power generation needs a tariff of just 0.3 yuan per kWh tobe profitable.

Considering that China has long overtaken the US as the world’slargest emitter of greenhouse gases, this is definitely something tohurrah about. According to government officials, China will likely have10 to 20 gigawatts of solar capacity by 2020, rising sharply from aprevious target of 1.8 gigawatts. They’ve still got a whiles to go—asof 2008, total installed solar-power generating capacity was well below0.1 gigawatts. However, as construction for the 2008 Olympics showed,if China sets its mind on a tangible, economy-boosting goal (and thepotential for good PR is high), the results won’t stray far off-target.