China will halve its subsidy budget for new solar power plants this year and stop subsidies completely for new offshore wind farms, in the latest move to alleviate government financial pressures.

The National Energy Administration announced Tuesday that this year’s national subsidies for new solar power projects will be 1.5 billion yuan ($215.8 million) 50% lower than before. One billion yuan will be allocated to large solar projects through an auction process, and the remainder will be used for residential solar systems.

The country is also scrapping subsidies for new offshore wind projects starting this year, and is set to end subsidies for new onshore wind farms in 2021. Shi Jingli, a professor at a research institute under China’s top economic planner, told Caixin that the generous subsidies that have previously been given to offshore wind farms over the past few years have weighed heavily on central government’s finances and caused severe deficits in its subsidy funds. Scrapping part of the subsidies for renewable energy is a reasonable action in order to allocate funds wisely.

Considering the impact of the coronavirus outbreak on business operations, the authority has extended the application period for the auction to mid-June, and given one more month for solar and wind farm applications to connect their power generators to the state’s electrical grid to the end of April -- a process necessary for power plant to sell electricity.

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Contact reporter Lu Yutong (yutonglu@caixin.com)