Chinese solar power developers have made their lowest bids so far in a tender to build a one gigawatt solar power base in Inner Mongolia, aiming to accelerate a transition to renewals, China Business News said on Friday.
Fifty solar PV manufacturers and generators have bid as low as 0.52 yuan ($0.0780) per kilowatt hour in the tender backed by the government in northern Inner Mongolia, the newspaper said.
The price offered by a subsidiary to China Huadian Gorp is close to the upper end of China’s coal-fired thermal power price in some regions.
However, it is much higher than solar costs in countries such as the United Arab Emirates.
“Policy incentives have been given to such government-backed projects which are not available to other commercial utilities, which take higher financial losses through transmission curtailment and subsidy default,” said a bidder who declined to be named because he is not authorised to speak to media.
China has delayed payments to solar power operators for more than a year as overseas appetite for its manufactured goods wanes.
But on Friday the Ministry of Finance approved renewable power projects for subsidies delayed since 2015, according to an official statement published on its website.
Subsidies are given to power suppliers and to some manufacturers who act as subcontractors on solar projects.
China installed 20 gigawatts (GW) of solar power capacity in the first half of 2016, which took the new commercial solar power capacity above its 2016 target at 18.1 GW.
The government said it would halt approvals to new projects in western regions such as Gansu and Xinjiang where solar projects are concentrated.
To make solar power cheaper and increase domestic demand, China has pushed use of the best available equipment.
Many such programmes are located in coal mining provinces looking to shift to renewables.
In China’s top coal producing Shanxi province, solar module producer GCL New Energy (GLC) pushed its price down to 0.61 yuan per kilowatt hour in another tender a month ago.
“Such a low bidding price fell below the widely accepted offers mostly at 0.7-0.75 yuan,” said Qin Haiyan, director with the solar and wind simulation agent, the China General Certification. ($1 = 6.6690 Chinese yuan renminbi) (Reporting by Kathy Chen; Editing by Ruth Pitchford)