China to Reduce Renewable Energy Subsidies After Record Solar Boom

China’s top economic planning agency, the National Development and Reform Commission (NDRC), has announced plans to scale back subsidies for renewable energy projects following an unprecedented surge in solar and wind power installations.

China set a new record for solar energy expansion in 2024, with installed capacity growing by 45% compared to the previous year. According to the International Renewable Energy Agency (IRENA), China’s total solar capacity now stands at 887 GW, more than six times that of the United States. This rapid expansion allowed China to achieve its 2030 renewable energy target six years ahead of schedule.

Shift to Market-Based Pricing

With clean energy now making up over 40% of China’s total power generation capacity, the NDRC and China’s Energy Administration have introduced “market-oriented” policy adjustments. The agency cited a significant drop in development costs as a key reason for phasing out direct subsidies.

Under the new policy, any renewable energy projects completed after June 2025 will have to sell electricity through market-based bidding rather than relying on guaranteed prices.

Global Energy Landscape

China’s clean energy expansion contrasts with U.S. policy shifts, as President Donald Trump has withdrawn the United States from the Paris Climate Agreement for the second time while pushing for increased oil and gas drilling.

Despite the subsidy rollback, China remains committed to its renewable energy leadership, with its clean energy policies now moving toward a more self-sustaining market-driven model.