By Winnie Zhu
March 27 (Bloomberg) -- Baoding Tianwei Baobian Electric Co. and Shandong Jinjing Science & Technology Stock Co. led gains by Chinese solar power companies in Shanghai trading after the government said it would pay a subsidy for solar projects.
Hebei province-based Tianwei Baobian rose by the 10 percent daily limit to 31.28 yuan as of the 11:30 a.m. break in Shanghai, headed for its highest close since July 29. Jinjing Science & Technology rose 9.9 percent to 14.27 yuan, while Wuhan Linuo Solar Energy Group Co. rose 8.4 percent to 10.20 yuan. The benchmark Shanghai Composite Index gained 0.5 percent.
China, which is closing older coal-fired power plants in favor of cleaner energy sources, said yesterday it will offer 20 yuan ($2.93) per watt-peak of power output for solar projects with at least 50 kilowatt-peak of capacity. The government subsidy will help boost domestic demand for solar power equipment, said Gu Jiahao, analyst with CSC Securities HK Ltd.
“The subsidy could offset half the installation cost for solar-power rooftop programs, which would cause a big boost for domestic demand,” Gu said by telephone from Shanghai today.
China, the world’s second-biggest consumer of energy, derives 80 percent of its electricity from burning coal.
The nation aims to boost renewable energy use to account for 10 percent of its total energy consumption by 2010 from 7.5 percent in 2005, the National Development and Reform Commission, China’s top economic planner, said last March. Solar power capacity will rise to 300,000 kilowatts from 70,000 kilowatts.
To contact the reporter on this story: Winnie Zhu in Shanghai at wzhu4@bloomberg.net
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