Author: PPD Team Date: 11/02/2025
China’s National Development and Reform Commission (NDRC), along with the nation’s energy administration, is taking steps to roll back subsidies for renewable energy projects, according to Reuters.
In 2024, China saw a record-breaking 45% rise in solar installations, reaching nearly 887GW of installed solar capacity—six times the size of the United States’ solar power capacity, as per the International Renewable Energy Agency. This rapid growth has enabled China to meet its 2030 clean energy targets six years ahead of schedule.
More than 40% of China’s total energy generation now comes from clean energy sources, driven in part by a pricing system that offered fixed rates for renewable energy sold to the grid. The NDRC stated, “The cost of new energy development has dropped significantly compared to earlier stages.”
However, the NDRC has announced that projects completed after June 2025 will transition to a “market-based bidding” system for electricity payments. The agency anticipates this change will not affect residential or agricultural power prices but may impact industrial and commercial operations, which will see “basically the same” costs.
The NDRC is working with local governments to implement the new pricing strategy, though specific details of the pricing formula have not been disclosed.
The reduction in subsidies could put additional pressure on China’s solar industry, which is already struggling with overcapacity and falling panel prices that threaten smaller manufacturers’ viability.
In response, China increased its grid investment in January 2025, the first time since 2018 that the annual grid spending has exceeded that of generation projects. This boost aims to ensure the efficient delivery of clean power to homes and businesses.