China’s price regulator announced this week that it will cut tariffs paid to solar and wind projects in order to reflect the continuing decline in project costs.
Bloomberg New Energy Finance communicated news from China’s national price regulator and economic planner, which on Monday announced it would reduce the amount of money it pays to newly completed wind and solar projects for their electricity. The cuts to tariffs for solar will be by as much as 19%, and by as much as 15% for wind, according to the National Development and Reform Commission (NDRC). This will reduce subsidies paid to new wind and solar projects by approximately 6 billion yuan annually, or around $863 million.
The NDRC has also encouraged local authorities to continue to make use of auctions to select renewable energy developers, in an effort to keep prices low.
Renewable energy costs haven’t only been falling in China, with dramatic cost declines around the world. A report from GTM Research in early December revealed that solar prices had already fallen 33.8% since the first half of 2016, and expects solar costs to continue to decline. Wind costs also continue to decline, especially offshore wind which has fallen 22% as a result of competitive bidding — a figure which is only likely to fall further at the next census, given recent low-price auction wins in Europe.