China’s National Development and Reform Commission (NDRC) announced plans to reduce subsidies for renewable energy projects following a significant surge in solar and wind power installations.
In 2024, the country experienced a 45% increase in solar power capacity, reaching nearly 887 gigawatts—more than six times that of the United States. This rapid expansion enabled China to achieve its 2030 clean energy target six years ahead of schedule.
The NDRC noted that the substantial growth in clean energy capacity, now accounting for over 40% of China’s total energy generation, was partly due to guaranteed pricing mechanisms for renewable energy.
However, with the decreasing costs of new energy development, the agency stated that new projects completed after June will have electricity payments determined through market-based bidding.
The NDRC emphasized that this shift is not expected to affect electricity prices for residential, industrial, or commercial users.
This policy change may exert pressure on China’s solar industry, particularly smaller producers, as overcapacity issues and reduced subsidies could impact their operations. The NDRC plans to collaborate with local authorities to implement the new measures effectively.
China’s move to scale back subsidies reflects its confidence in the renewable energy sector’s maturity and its commitment to integrating clean power into a market-oriented framework.
