The National Development and Reform Commission (NDRC), China's top economic planner, is soliciting comments on reducing benchmark sale price of wind and photovoltaic among local governments and power companies.
According to NDRC, the benchmark sales price of photovoltaic power in the first grade resource area will be reduced 5.6 percent to 0.85 yuan/Kwh in 2016, and that in the second grade resource area will be reduced 3 percent to 0.92 yuan/Kwh.
The benchmark sale price will be reduced 0.03 yuan/Kwh each year from 2017 to 2020. The benchmark sale price of wind power in the first grade resource area will be cut 22.4 percent to 0.38 yuan/Kwh in 2020, and that in 4th grade resource area will be cut 14.8 percent to 0.52 yuan/Kwh.
According to a report released by BOCOM International Securities, the reduction range of benchmark sale price has far beyond market expectation, which led to the slump of share prices of listed wind power companies.
Analysts said that delay of subsidy granting has a bigger influence on power companies than subsidy reduction due to the cut of benchmark sale price. The subsidy of renewable energy had been delayed for over two years.
China has so far allocated five batches of renewable energy subsidies. The last batch of subsidy was granted in August of 2014 to subsidize the project completed one year ago. By the first half of this year, 20 billion yuan of subsidies has been delayed in photovoltaic power field.