Solar subsidy program that rattled market relaxed

Chinese regulators have proposed easing a major solar power subsidy policy announced last year, according to the nation’s main industry group, a move which would partially reverse rules that undercut demand in the world’s biggest user and shook the global market.

Policy makers are starting approvals again for utility-scale, ground-mounted projects that receive subsidies, which were halted in June 2018. As part of the renewed approvals, developers of these large projects, as well as those for industrial use, will have to bid for government aid.

Shares of solar companies gained yesterday. Tongwei Co. rose as much as 5.8 percent in Shanghai to a nine-month high, while LONGi Green Energy Technology Co. added 4.8 percent. In Hong Kong, Xinyi Solar Holdings Ltd. climbed 3.7 percent. GCL-Poly Energy Holdings Ltd., which initially advanced 2.8 percent to extend the previous day’s 11 percent increase, pared those gains to trade 1.4 percent lower.

The move last year to cut subsidies for some solar projects was aimed at forcing provinces to utilize unused capacity and reduce subsidy bills. But it also hurt demand and depressed solar material prices globally, roiling manufacturers. The reversal discussed this week may help capacity installations in the world’s biggest solar market rebound from last year’s slump, according to the association. MDT/Bloomberg