> the decision the Chinese government made to heavily subsidize solar manufacturing
This is often claimed, but does anyone have budget numbers or even a decent order of magnitude estimate for how much subsidy was applied here? Or was it actually the free market supplying compounding cost reductions through technological improvements?
> does anyone have budget numbers or even a decent order of magnitude estimate for how much subsidy was applied
Cheap producer credit, covering up to 50% of new-facility costs and feed-in tariffs [1]. At least the latter began getting phased out after costing Beijing over $15bn in 2017 [2].
Haven’t run the precise numbers, but that one-year figure seems to line up with the IRA’s total solar package [3].
Thanks. [1] in particular is a very interesting read. If I understand it correctly, it's all through subsidy of generation rather than directly of manufacture? That is, while there might be subsidy ensuring demand for the product, if you purchase a solar panel from a Chinese producer at any time during this process there wasn't a direct subsidy included in that cost? Just a guarantee over that time of enough demand to keep the factory chugging along?
That is, it's identical to Western-style renewable subsidies?
> it's all through subsidy of generation rather than directly of manufacture
At least at the federal level, this seems to be the case.
> it's identical to Western-style renewable subsidies?
At least early on, most Western subsidies didn’t discriminate based on where the panel was produced. We also don’t have visibility into provincial books, where if how they treat coal is any indication, where the plants are there to buy coal from their coal mines, there is probably cross subsidy.
But given what we know, one could argue they’re structurally similar, at least in respect to what we’re doing now.
There was a report from MIT a few years back that looked into the price reductions of solar between 1978 and 2012, during which time module costs fell by 97%.
They suggest that early on R&D support from government was key, then later market support to help grow the scale of deployment. Since 2001 its been manufacturing scale that has dominated price reductions.
It's claimed in the source economist article and reuters also claims it [1].
It's unlikely that the Chinese government wants to say how much it subsidizes, as this will prompt tariff increases from importing countries.
This is often claimed, but does anyone have budget numbers or even a decent order of magnitude estimate for how much subsidy was applied here? Or was it actually the free market supplying compounding cost reductions through technological improvements?