China’s Ministry of Finance has revealed subsidies for renewable energy in the country will increase by nearly 5% next year.

A notice issued by the ministry late last week confirmed that subsidies for renewable energy projects in the country in 2021 will total RMB5.95 billion (US$900 million). 14 provinces (including autonomous regions and municipalities) such as Shanxi, Inner Mongolia, Jilin, Zhejiang, Hunan, Guangxi, Chongqing and Xinjiang, are to receive the grants.

Among them, Inner Mongolia will receive the significant majority of the funding, receiving RMB5.10 billion (US$775 million) alone.

The grants are distributed to different generation categories and solar will receive the largest pot. The complete pot allocation is detailed below.

- Wind: RMB2.311 billion
- Solar: RMB3.384 billion
- Biomass: RMB59.7 million
- Independent System of Public Renewable Energy: RMB198 million

The notice stipulates that power grid enterprises shall strictly follow the Method of Fund Management to prioritise full-amount grants to national poverty-alleviation solar projects, distributed projects owned by natural persons with installation sizes less than 50kW, solar projects determined through bidding in 2019, and new projects approved in 2020 by the principle “expenditure determined by revenue”, when appropriating the subsidy.

For so-called ‘Top Runner’ projects approved by the state and village-level poverty-alleviation solar stations built by local governments in accordance with the central government’s policies, 50% of the amount due shall be ensured.

The notice also stipulates that local governments shall strictly follow the budget management requirements to transfer the funds to power grid enterprises or those running the independent system of public renewable energy as soon as possible. Funds received for a single project shall not exceed the corresponding amount of the reasonable service hours specified by National Development and Reform Commission.

It is worth noting that the notice is only for budget of additional subsidy for renewable energy in 2021, not a notice of money issuance. It is clearly said in the notice that “the funds will be appropriated in accordance with procedures once the the budget year of 2021 starts,” with the budget year running 1 January – 31 December 2021.