"Five Initiatives by the State Council to Foster Growth in the Photovoltaic Sector"

Promoting the Development of the Photovoltaic Industry: Key Policy Measures Outlined

On the 19th, a significant meeting led by Premier Wen Jiabao was held to discuss strategies aimed at fostering the healthy growth of China's photovoltaic (PV) industry. The gathering highlighted the rapid advancements made in the sector over recent years, resulting in a comprehensive manufacturing framework. However, it also acknowledged critical challenges, including substantial overcapacity, excessive dependence on foreign markets, and widespread operational difficulties.

The meeting underscored the strategic importance of the photovoltaic sector, emphasizing its role in transforming the energy landscape, enhancing energy production and consumption methods, and contributing to ecological sustainability. While the industry faces considerable hurdles, these challenges also present opportunities for necessary adjustments and upgrades. Notably, the significant reduction in photovoltaic power generation costs has created favorable conditions for expanding the domestic market.

To navigate these challenges and enhance competitiveness, the meeting outlined several key policy measures:

1. Accelerating Industrial Restructuring and Technological Advancement: The meeting advocated for leveraging market dynamics to encourage mergers and acquisitions, phase out outdated production capacities, and elevate technological standards. There will be stringent controls on new projects related to polysilicon, photovoltaic cells, and components that merely aim to increase production capacity.

2. Regulating Industrial Development: A call was made to strengthen the coordination between photovoltaic power generation planning and the development of supporting power grid infrastructure. Establishing an efficient grid connection service system and enhancing technical standards are also priorities. Market supervision will be reinforced, and mandatory inspection and certification for essential equipment will be implemented.

3. Expanding the Domestic Photovoltaic Application Market: The meeting emphasized the importance of promoting distributed photovoltaic generation systems. Efforts will be made to encourage various entities, including communities and households, to adopt these systems and to facilitate the orderly construction of photovoltaic power plants. Additionally, international cooperation will be pursued to strengthen and broaden market reach.

4. Enhancing Support Policies: In alignment with regional resource conditions, benchmark pricing for photovoltaic power stations will be established. Subsidies will be made available for distributed photovoltaic generation, and adjustments to on-grid tariffs and subsidy standards will be made in response to cost fluctuations. The central government will also enhance financial mechanisms to support photovoltaic development, ensuring that projects benefit from the same VAT preferential policies as those for wind power.

5. Utilizing Market Mechanisms: The meeting advocated for reducing governmental interference and prohibiting local protectionism. Improvements to electricity pricing mechanisms and subsidy evaluation will be made to enhance policy effectiveness. Industry organizations are encouraged to play a vital role in fostering self-discipline and guiding the sector's healthy development.

All relevant departments were urged to promptly formulate and refine supporting policies to ensure effective implementation of these measures.

In addition to these discussions, the meeting also addressed other pertinent matters related to the industry’s future.