Latest Chinese cleantech subsidy goes to lighting

China's government announced today RMB 600 million ($87.8 million) in subsidies for energy-efficient lighting products. 

The funds are expected to put 120 million products in use, including those from Philips Electronics, Panasonic and 21 other companies. Government officials said they expect the subsidies to result in 6.2 billion kilowatts of electricity being saved.

The government subsidized 50 million energy-efficient lighting products in 2008, offering incentives of 50 percent for retail sales and 30 percent for bulk purchases. The subsidies go to manufacturers that submit the lowest bids.

China is the world's largest producer of energy-efficient bulbs, accounting for 80 percent of world production in 2007.

Last week, China announce plans to subsidize other energy-efficient electronics, including air-conditioners, refrigerators, washing machines, televisions, microwaves, water heaters, and computers.

China has also put significant funds into boosting the solar industry, which has struggled in recent months because of sluggish demand, declining prices and excess inventory (see LDK stock spikes despite dismal Morgan Stanley solar report). In March, the government authorized a cash grant of RMB 20 ($2.90) per watt in order to encourage the adoption of solar (see New solar subsidies in China set to reduce installed cost by half). 

China is spending RMB 4 trillion ($585 billion) in 2009 to stimulate the economy, with RMB 350 million, or nearly 9 percent, planned for ecological projects, many of which are connected to water conditions (see China's stimulus package boosts water desal, recycling). The government already spent RMB 120 billion in the fourth quarter of 2008, with about 10 percent of the money going to energy saving and ecological projects.  

China isn't alone in planning stimulus funds to jump start its cleantech industry. Almost $400 billion of roughly $2.6 trillion in economic stimulus allocations announced so far by G20 nations are earmarked for clean technologies such as renewable energy, improved electrical grids and cleaner cars (see Cleantech investment drops but stimulus funds soar in 1Q09).