China Said to Mull Bigger Cut in Solar Prices in Some Regions

  • NDRC may cut solar power prices by 13% from 2016 level
  • Average panel prices have plunged 26% in the past year

China may cut the amount of money that solar power generators receive for electricity by more than previously planned, according to two people familiar with the matter.

The National Development and Reform Commission may reduce tariffs for solar farms in regions that receive the least amount of sunlight by about 13 percent in 2017 from the 2016 level of 0.98 yuan (15 cents) a kilowatt-hour, said the people, who asked not to be identified because the information isn’t public.

The cut compares with a 2 percent reduction the agency had planned for 2017. The move hasn’t been finalized and may be adjusted later, said the people.

How much solar power generators receive in China is set by the government and includes prices paid by utility companies and subsidies provided by the government.

The move comes as average solar panel prices have tumbled more than 26 percent in the past year, according to data compiled by Bloomberg. The slump has resulted in a lowering of the bids that solar developers offer to build projects. Qingdao New Energy Solutions Inc. this month won a tender to build a solar farm in China’s northern province of Inner Mongolia with a bid of 0.52 yuan a kilowatt-hour, the cheapest on record for China.

The NDRC, China’s top economic-planning agency, didn’t respond to a fax seeking comment.