China's power producer Huadian will partner with domestic solar products manufacturer Suntech to develop 500 megawatts of solar projects in China over the next three years, the two companies announced yesterday.

According to their agreement, Huadian New Energy Development Co, a unit of China Huadian Corp, will be responsible for the investment and construction of the projects. Suntech will provide crystalline silicon solar panels, system design as well as technical support.

The cooperation will be carried out in two phases, said an official with the Huadian New Energy Development Co. The first phase will focus on solar projects in northwestern China and the second phase on coastal areas in eastern China.

The deal comes on the heels of a new government announcement to subsidize large solar power projects.

According to the program, the government will offer 50 percent of investments for solar power projects of more than 500 megawatts and the transmission and distribution network over the next two to three years.

Solar power projects in the remote regions will receive subsidies of 70 percent of the investment.

"Recent favorable policies have prompted power firms to accelerate their expansion in the new energy field, but the economic returns depend on specific measures and costs," said Wang Sicheng, a member of China Renewable Energy Society and an expert on solar power application. "Some criteria in the subsidy policy are not clear and they need to be specified."

For more information, please consult the Chinese coverage:

http://finance.jrj.com.cn/biz/2009/07/2309095586882.shtml

(China.org.cn July 23, 2009)