(Yicai Global) June 6 -- The executives of 11 solar power companies sent a joint letter to state-run Xinhua News Agency, calling for increased government attention to the problems of the photovoltaic industry, the Securities Times reported.

The executives, including Liu Hanyuan from Tongwei Group and Cao Renxian from Sungrow Power Supply, demanded the solar projects that have already secured construction approvals be supported and called on the relevant government departments to listen to the industry opinion in crafting new policies, the report said.

Entitled "Urgent Request from Entrepreneurs Regarding New PV Policy Issued by Three Ministries Effective from May 31" and undersigned by "solar power entrepreneurs and workers" first circulated on the WeChat messaging app yesterday.

The government owes the PV industry more than CNY100 billion (USD15.6 billion) in subsidies since 2015, while it gives CNY100 billion of subsidies to thermal power companies per year, the solar power entrepreneurs complained in the joint letter.

Comparisons

In foreign countries, PV electricity prices could be as low as CNY0.14, thanks to zero land costs, zero tax, financing costs of less than 3 percent and subsidies, said the entrepreneurs. In China, however, companies face not only high land prices, various taxes and local government requirements on complementary facilities and poverty alleviation when building PV power plants but also elevated financing costs, all of which have led to a substantial increase in the investment costs of non-PV systems, they claimed.

It will take another three to five years to achieve fair feed-in tariff in the PV industry, which still needs continued government support, the letter said.

Starting from May 31, no ordinary PV power plants with national subsidies are allowed to be built this year before the government issues the relevant documents, and subsidies for distributed solar power generation will be lowered to CNY0.32 per kilowatt-hour, according to a new PV policy jointly issued by the National Development and Reform Commission, China's top macroeconomic planner, and other two ministries.

The decision has shaken the PV industry substantially. Solar power stocks fell across the board following the announcement of the decision on June 4, with Sungrow Power Supply plunging by its daily limit.

The PV industry generated 118.2 billion kilowatt-hours last year, accounting for 1.82 percent of the country's total electricity output, and required some CNY60 billion in subsidies, publicly available data showed.

Some 22 leading solar companies had a combined net profit of CNY11.8 billion last year. It is estimated that hundreds of solar firms had net profit of more than CNY100 billion.

Editor: Mevlut Katik