advantages and disadvantages of subsidy policy

can subsidies continue to drive the development of the industry? Judging from the development experience of photovoltaic and new energy vehicles, the answer to this question is not optimistic. In fact, subsidies are a "double-edged sword": on the one hand, subsidies have indeed stimulated the rapid growth of the industry; On the other hand, if subsidies are not adjusted in time with the growth of the industry, it will bring about the consequences of blind expansion of production capacity and slow technological progress, and it is not advisable to rely too much on subsidies.

the subsidy policy is accompanied by the development of China's photovoltaic industry. In 28, the financial crisis led to the contraction of overseas market demand. In order to support the development of China's photovoltaic industry, the state started the Golden Sun demonstration project in due course, and subsidized grid-connected photovoltaic power generation according to 5% of the investment. Subsidies led to the rapid expansion of photovoltaic production capacity, which directly led to the "double-reverse" investigation of photovoltaic enterprises in China in Europe and America during 11-12 years. In 13 years, the "National Eight Articles" of the photovoltaic industry was introduced, and the total installed capacity was planned to reach more than 35GW in 15 years, and the photovoltaic subsidy period was defined as 2 years. The photovoltaic industry was encouraged by subsidies to meet the development peak again. In addition, the on-grid tariff subsidy system that has existed for a long time has also maintained the profits of the industry and continuously attracted new capacity input.

with more than half of the newly installed photovoltaic installations in the world, the problem of light rejection in power generation is serious. Driven by the subsidy policy, China's photovoltaic industry has expanded rapidly. In 17 years, China's newly installed photovoltaic capacity exceeded 5, megawatts, accounting for more than 5% of the world's newly installed capacity, and the cumulative installed capacity has also ranked first in the world for three consecutive years. However, at present, China is not enough to absorb such a large-scale photovoltaic production capacity, and the problem of light rejection in power generation is still serious. In 17 years, the light rejection rates in Gansu and Xinjiang are both above 2%.

the financial burden is overwhelming and the price competition is fierce. Subsidies have made the photovoltaic industry, but excessive subsidies have also led to the blind expansion of the industry's production capacity. At present, subsidies have done more harm than good to the development of the photovoltaic industry: on the one hand, subsidies have increased the financial burden, and the gap in renewable energy development funds has been expanding, so it is necessary to raise the surcharge rate of renewable energy tariffs again and again, and the subsidy standard for photovoltaic on-grid tariffs has also dropped again; On the other hand, the subsidy policy makes the industry pay more attention to scale expansion than technological upgrading, and the competitive pattern of winning by quantity makes the profit rate of manufacturers diluted again and again. The export unit price of photovoltaic modules dropped from .69 USD/watt in early 14 years to .33 USD/watt in June 18 years.

Subsidies are declining rapidly, and the industry is facing integration. In May of 18, the National Development and Reform Commission and other three ministries and commissions issued the Notice on Matters Related to Photovoltaic Power Generation in 218, proposing to speed up the decline of subsidies for photovoltaic power generation and reduce the intensity of subsidies. The benchmark on-grid tariff will be reduced by another .5 yuan per kWh, and the construction of ordinary photovoltaic power stations will not be arranged for 18 years. The acceleration of subsidy retreat makes the photovoltaic industry face a test, the competition with excess capacity will become more and more fierce, and the process of industry integration may be accelerated.

the new energy vehicle industry started, and subsidies boosted both production and sales. China's new energy vehicle industry is in the initial stage of development. At present, the proportion of production and sales is still below 5%, and China's subsidies for new energy vehicles have driven the rapid growth of production and sales. In the decade from 25 to 215, the total amount of government subsidies for new energy vehicles in China exceeded half of that in the world, and the government subsidies exceeded 8 billion yuan in 16 years. As a result, the growth rate of new energy vehicle production and sales far exceeds the overall growth rate of the automobile industry. In the past 16 years, the monthly average growth rate of new energy vehicle production has exceeded 6%, while the average growth rate of automobile production has been less than 1%. The average monthly growth rate of new energy passenger car sales exceeds 9%, while the average growth rate of passenger car sales is only about 8%.

there are signs of overcapacity. The new energy vehicle dealers driven by subsidies are showing signs of overcapacity. According to the data of china automobile dealers association, by the end of June 15 -17, all kinds of vehicle companies have publicly planned the production capacity of new energy vehicles for more than 2 million vehicles, which is 1 times the target set in the Medium and Long-term Development Plan of Automobile Industry, and most of these projects will be completed and put into production before 22.

subsidies will be withdrawn in due course, and standards will be gradually raised. Drawing lessons from the photovoltaic industry, the subsidy policy for new energy vehicles has been adjusted in advance: on the one hand, before the production capacity has entered a serious surplus period, the subsidy standard has begun to decline year by year to prevent further blind expansion of enterprise production capacity; On the other hand, the technical standards applicable to subsidies for new energy vehicles are also steadily improving, and subsidies are concentrated on new energy vehicles with better performance indicators, so as to encourage enterprises to continuously improve the technical level of new energy vehicles and enhance the endogenous development momentum of the industry through R&D and innovation.

the development experience of photovoltaic and new energy vehicle industry enlightens us that the role of subsidies should be limited to providing initial kinetic energy and technological innovation incentives in the early stage of development, and the industry development must eventually get rid of subsidy dependence. The subsidy policy that is not used carefully can easily lead the industry into the dilemma of overcapacity.

in a word: the photovoltaic and new energy vehicle industries have experienced rapid growth in production and sales under the incentive of subsidy policy; However, the subsidies of photovoltaic industry have not been adjusted in time with the growth of the industry, resulting in blind expansion of production capacity. The new energy vehicle industry has learned lessons and the subsidy policy has been adjusted in advance to prevent blind expansion of production capacity; At the same time, subsidies are concentrated on new energy vehicles with better performance indicators, which encourages enterprises to continuously improve the technical level of new energy vehicles.