China is upping its solar target once again, after having done so several times in past couple of years.
Last year, China raised the target to an eye-popping 21 gigawatts (GW) by 2015, and the new target of 35 GW is 67% higher than that.
That means, in just 3 years, China will have added five times the solar it has installed today - about 6.5 GW.
For perspective, consider that all the solar installed over the years adds up to 5.9 GW in the US, and that's after some record-breaking years.
Since 2011, China had 2 GW of solar and has more than tripled it since then. 10 GW are planned for this year, for which $2.1 billion in subsidies have already been allocated for domestic solar project developers.
The country has every reason to do this. The air is so thick with smog that people can barely see, much less breathe, reaching record levels in Beijing this month. As China sees the real effects of climate change in catastrophic floods and drought, it's got to become more energy efficient and reduce carbon pollution.
As of the end of 2011, China burned almost as much coal as the rest of the world combined, according to the International Energy Agency.
Then there's its suffering solar industry. After flooding US and European markets with low-priced solar panels, China's solar manufacturers are reeling from oversupply and too tight margins. The industry needs a local market to buoy flagging sales.
"We've got more pressure to save energy and reduce emissions as smog worsens due to pollution," he said. China will use renewable energy to cut coal consumption and support the domestic industry amid U.S. and Europe anti-dumping charges against Chinese solar products, Shi Dinghuan, counselor of China's State Council and president of the Chinese Renewable Energy Society, told Bloomberg.
Besides adding significant amounts of renewable energy, the government is also looking at ways to further raise energy efficiency. As of July 1, 2012, a trial is underway that charges residents higher electricity rates when they exceed baseline levels.
The country is also moving ahead on its cap-and-trade program, which goes into effect in 2015. Seven pilot programs in major cities will be rolled out this year and this month, China set a cap on carbon emissions at 4 billion tons of coal equivalent by 2015.
For the past two years, China's carbon emissions growth offset significant cuts in the US and EU, resulting in a 3% increase in global emissions.
Other measures will incentivize dirty companies to clean up their act, such as China's green credit policy. Last year, the government announced it would support development of seven industries through subsidies and loans. At the same time, banks will be required to deny loans to polluting, inefficient companies.
Guidelines have been issued that help lenders rate companies on their environmental and social risks.
And if companies fail environmental inspections, they won't be allowed to file for an IPO.