China reduces the amount of money paid for facilities, which generate solar and wind power to the energy network of the country. The decision of the second largest economy in the world corresponds to the decrease in construction costs, the price of regulators and changes in economic planning.
The country will reduce rates paid for solar farms, by 19% in 2017 and 15% for wind farms in 2018, according to a statement of the Chinese National Development and Reform Commission.
The changes will help to reduce the subsidies paid to new photo-voltaic and wind projects of around 6 billion CNY annually (or 863 million USD).
The move comes amid falling prices for solar panels, which melted by about 30% this year. The decrease is a result of lower prices of tenders, which solar developers offer to build the projects. The prices for wind turbines also decreased in 2016.
China will also encourage local authorities to continue the use of tenders for selection of developers of renewable energy to help lower rates of capacity.
Between 2008 and 2013, China’s fledgling solar-electric panel industry dropped world prices by 80 percent, a stunning achievement in a fiercely competitive high-tech market. By the end of 2020, renewable energy facilities will supply 1.9 trillion kilowatt-hours of electricity, accounting for 27% of total power generation, according to the plans of National Development and Reform Commission.