BEIJING, Jul. 9, 2009 (Xinhua News Agency) -- Jiangsu province, home to most of China's solar power (OTCBB:SOPW) enterprises, has announced a plan of promoting the photovoltaic (PV) industry by granting subsidies to PV solar power generation, aiming at building 400 MWp solar power system in the province before 2011.
The new policy will undoubtedly benefit those solar power enterprises that have production facilities in the province. Among them, Suntech Power (STP.NYSE), Trina Solar (NYSE:TSL) (TSL.NYSE), Solarfun Power (NASDAQ:SOLF) (SOLF.Nasdaq), JA Solar (JASO.Nasdaq) and China Sunergy (NASDAQ:CSUN) (CSUN.Nasdaq) are listed in overseas stock market like NYSE, Nasdaq.
According to the province's Opinion on Promoting PV industry promulgated recently following the state's solar power roof program, the province hopes to build 400 MWp solar power facilities in three years. They include roof power generation project (260 MWp), building-integrated power generation project (10 MWp) and ground power generation project (150 MWp). The province is set to construct 80 MWp, 150 MWp and 170 MWp plants in 2009, 2010 and 2011 respectively.
Suntech will be assigned to build 80MW of roof projects; Trina Solar, 30MW; Solarfun Power, 30MW; JA Solar (JASO.Nasdaq), 20MW; and ET Solar, 20MW. Suntech is also among those enterprises assigned to invest and build the building-integrated power generation project.
Through the building of PV power generating facilities, the province hopes to boost the development of the entire PV industry and form a batch of PV power generation enterprises of competitive edge. By 2011, the province will be capable of producing 10,000 MW of solar cell and panel production annually and its PV industry is expected to generate gross output value of 350 million yuan.
In an effort to stimulate the use of solar power, which has a cost much higher than the coal-fired power, the province will build a special fund earmarked to subsidize the margin between target PV power price and benchmark coal-fired grid power price, in addition to the state's fiscal subsidies to solar roof project and renewable energy.
With a final target at actualizing a 1 yuan/kwh grid price, the province has also formulated target PV power prices for the coming three years as the following chart shows: ( Unit: Yuan/kwh) Year Ground Roof Building-integrated 2009 2.15 3.7 4.3 2010 1.7 3 3.5 2011 1.4 2.4 2.9
What's more, the province will combine government support and market mechanisms in order to encourage enterprises to actively research and develop PV technology, reduce cost and improve competitive edge.
Jiangsu province is a leader in China's solar power utilization for many reasons. First of all, its regional climatic conditions are favorable since the average annual duration of sunshine lasts between 1,400 and 3,000 hours. Also, the amount of solar power generated per square meter of land equals the power generated by 140 kg to 190 kg of coal. Second, vast tracts of land in northern Jiangsu aren't suitable for growing corps and trees, but are good for developing ground solar power generation projects. Third, a plethora of roofs and buildings in the province can be outfitted with PV technology.
Currently, Jiangsu-based companies have established 12 PV power stations totaling a capacity of 2.85 MW while another five 4 MW PV projects are being carried out nationwide.
