Focus on Arts and Ecology

Eleven of China’s solar manufacturing giants have addressed an open letter to the Chinese government pleading for a reversal of a June 1 decision to decrease the feed-in tariff subsidy for the solar industry and cut back on domestic solar installations in 2018.

Constituting half of the global solar market, China’s sharp policy shift has reverberated across markets globally. The move is expected to cut global solar prices by 35% by year end as Chinese manufacturers look overseas to offload production. The value of some solar companies dropped as much as a quarter over the week. Some predictions suggest that China’s solar installation could drop by 40% this year.

China’s solar industry expanded rapidly thanks to renewable energy subsidies but these created a 100 billion yuan (US$15.6 billion) deficit by the end of 2017. Large drops in equipment costs due to industry innovation led experts to argue that the subsidies provided by the Chinese government were no longer required. While the change may lead to a short-term slowdown in solar installations domestically, experts predict that this development will make the solar industry stronger and push Chinese solar companies to seek new markets abroad.