China adjusts taxation to promote solar photovoltaic (PV)

China’s taxation authorities announced on Wednesday that buyers of distributed photovoltaic (PV) power should invoice for purchases, a move to reduce the tax burden on PV power producers and promote green energy.

The buyers, mainly companies of the State Grid, will be required to invoice power generators from July 1 to make PV power transactions easier, said the State Administration of Taxation.

The move reverses the current practice and will boost the installation of building-integrated PV power projects, as most producers are individuals and non-enterprise entities and always experience difficulties with invoicing.

Electric power companies will also be allowed to collect value-added taxes on behalf of the authorities from PV power producers with monthly revenue exceeding 20,000 yuan (3,252 U.S. dollars).

Distributed PV power generation projects were mainly adopted by hospitals, schools, government offices and communities, which were allowed to sell their extra electricity after self consumption.

China added 800MW distributed solar PV capacity in 2013, bringing the total number to 3.1GW.