China Introduces a Unified Grid Feed-in Tariff for Solar Power

China’s government has introduced a unified grid solar power tariff, which analysts believe may produce a quickened pace for introducing solar power to private residences, along with boosting the stock of companies involved in solar development.

According to the National Development and Reform Commission, Beijing has set the solar power price charged by power plants to grid operators at 18 US cents per kilowatt-hour for projects which were approved before July 1 and are scheduled to become operational before the end of this year, The Shanghai Daily reported. The NDRC had previously approved on-grid tariffs on a case-by-case basis, adding that it would adjust the taxes in accordance with future investment costs and technology development.

Following the NDRC pronouncement, solar-related stocks rose on China’s stock exchanges, with GCL-Poly Energy Holdings Ltd, China's largest maker of polysilicon, the main raw material used to make photovoltaic panels, jumping 4.8 percent in a single day in Hong Kong HKEX stock exchange, while Shanghai Chaori Solar Energy Science and Technology Co rose 6.6 percent on the Shenzhen Component Index and SME trading.

Xiangcai Securities analyst Hou Wentao said, "The unified tariff will be positive to the industry in the long term because you now have a system in place. But in the near term, I don't see any explosive growth in domestic installations."

By. Charles Kennedy, Deputy Editor OilPrice.com