China Mulls Solar Company Requirements, Securities Journal Says

China is expected in the first half to establish the minimum requirements solar-component makers must meet in order to be exempt from stricter government control, the China Securities Journal reported.

The move is part of an effort to accelerate consolidation in the industry by weeding out weaker companies, the Journal said, citing people it didn’t identify. The requirements will provide benchmarks to evaluate various strengths and weaknesses of companies in the solar industry, according to the report.

China will set environmental protection standards by capping the amount of electricity consumed and waste liquid and gas emissions during production processes, the newspaper said. Investment in research and development must account for 4 percent of revenues for companies with sales of 50 million yuan ($8 million) to 200 million yuan and 6 percent for those with sales below 50 million yuan, the Securities Journal said.

Companies will be required to attain certain production capacity levels, the report said. Those that don’t meet the rules will face stricter policy control on bank loans, land approvals and environmental evaluation, the Journal said.

To contact the reporter on this story: Feifei Shen in Beijing at fshen11@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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