Subsidy cut to cool solar sector

Policy will ensure cheaper electricity prices, industry's sustainable development, analysts believe

New rules to reduce national feed-in tariffs for the photovoltaic industry will stabilize China's rapidly growing and overheating solar power sector, and make electricity cheaper for consumers in the long term, according to analysts.

"In the short term, the upcoming one or two years, the impact could be negative for manufacturers with lower margins," said Joseph Jacobelli, a senior analyst of Asian utilities at Bloomberg. "But the bigger developers like China Longyuan Power, Huaneng Renewables and others who still have returns from existing assets are likely to fare better in the long term, given their nationwide footprint and capacity to win bids for new capacity."