China launched a project to subsidize investment in solar energy production on July 21.

The initiative is known as Golden Sun and will provide subsidies to projects that produce more than 500 megawatts of solar power over the following two to three years.

The move is aimed at offsetting the losses the industry has incurred during the global downturn and also at further developing the country's solar energy industry.

The large-scale subsidy plan is expected to attract more enterprises to invest in the solar energy sector.

Also, as a government investment project, Golden Sun is expected to enhance domestic consumption and help stimulate economic growth.

According to a notice posted to the Ministry of Finance's website on July 21, the government will subsidize 50 to 70 percent of investment in solar power projects.

This is the third time this year that China has taken measures to assist the solar energy sector.

As the sector is highly dependent on the import of foreign technologies and its products are highly export-oriented, China’s solar panel makers were badly hit when the price of oil price fell sharply at the end of 2008 and demand for alternative energy dived.

In response to the news of this new iniative, most new energy related stocks rallied yesterday, driving up China’s A market shares index.

Links and Sources
Ministry of Finance: 金太阳示范工程正式启动 
Ministry of Finance: 关于实施金太阳示范工程的通知 
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