The Chinese National Development and Reform Commission (NDRC) has unveiled new solar and wind policies for the development of future subsidy-free projects. A series of subsidy-free wind and solar projects will be launched later in 2019 to take advantage of the falling solar and wind construction costs, which fell by 45% and 20%, respectively, between 2012 and 2017. Once built, they will generate power at the same price as non-subsidized coal-fired power plants and will not have to comply with any quota restrictions.
Wind and solar projects will receive governmental support on land and financing. As per the new policy, local authorities will be entitled to subsidize projects but the fundings cannot be used to support local manufacturers. Besides, power grid companies will also be encouraged to guarantee electricity purchases from pilot projects, lower transmission fees and prop up cross-regional deliveries of subsidy-free electricity.
Nationwide feed-in-tariffs (FiTs) and subsidies for PV distributed projects were already cut by CNY5c/kWh (US$0.8c/kWh) in May 2018 after a record capacity increase of 53 GW in 2017 left the government with a backlog of CNY120bn (US$18bn) in subsidy payments.