Solar is expected to be the biggest beneficiary of the plan that could be announced in the coming week.
China is planning to announce details of a new stimulus package with the biggest support to-date for the renewable energy industry, according to the Wenhui Daily.
The package would be the second major spending effort by the Chinese government to help the country recover from the economic crisis. China is spending RMB 4 trillion ($585 billion) in 2009 to stimulate the economy, with RMB 350 million, or nearly 9 percent, planned for ecological projects, many of which are connected to water conditions (see China’s stimulus package boosts water desal, recycling).
The government already spent RMB 120 billion in the fourth quarter of 2008, with about 10 percent of the money going to energy saving and ecological projects.
The new stimulus package for renewable energy is expected to pay particular attention to solar and photovoltaics. A draft is expected within the next week.
But local governments are already creating incentives for solar companies to help the sector recover from price declines and oversupply that has a number of factory shutdowns (see Top Chinese firms propose solar electricity for 14¢ per kWh). Revenues from solar panels are expected to drop as much as 19 percent in 2009 (see Is this the end of China’s solar boom?).
The government of Kaihua County in eastern China said this week it would offer grants of between RMB 1 million and RMB 10 million ($146,000 to $1.4 million) for solar manufacturers that begin production or add capacity at their factories (see Kaihua lures new solar plants with $1.4M grants).
China isn’t alone in planning stimulus funds to jump start its cleantech industry. Almost $400 billion of roughly $2.6 trillion in economic stimulus allocations announced so far by G20 nations are earmarked for clean technologies such as renewable energy, improved electrical grids and cleaner cars (see Cleantech investment drops but stimulus funds soar in 1Q09).