China considers cutting solar subsidies by as much as 40%

• China reportedly has proposed a cut of as much as 40% in subsidies for solar projects (TAN +0.1%), renewing concerns about waning state support for clean power after years of rapid investment in capacity.
• A draft document reviewed by local media showed China's top central planner is considering cutting the subsidy to $0.20/kwh from $0.42 now.
• The Chinese government has been running a deficit subsidizing renewable energy; Morgan Stanley says the country's renewable energy fund now has a 55B yuan deficit.
• Shares of Hong Kong-listed Chinese renewable energy companies, such as China Longyuan Power (OTCPK:CLPXF), fell as much as 10% on the news.