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What Are The Legal Attributes Of Photovoltaic State Subsidies?
May 11, 2018

What is the legal attribute of the PV state subsidy?
In all kinds of investment and financing operation of photovolt power station, the cash flow of power station is the underlying asset of designing all kinds of financial products, and its stability directly affects the safety of the upper financial products. In China, the cash flow of power stations constitutes China. For the time being, the local subsidies of provinces, cities and counties are not discussed. In addition to the electricity charges corresponding to the coal price, there is also an important aspect of the cash flow structure of power stations. State subsidies(for full-access photovoltaic power stations, Subsidies are expressed as part of the feed-in price(including environmental tariffs such as desulphurization) of local coal combustion units by the electricity price of Gaochu, which is subsidized through the Renewable Energy Development Fund. The nature of the coal price corresponding to the electricity price is easy to understand, and there is no need to say more; How the legal attribute of state subsidies should be understood will have a profound impact on the scope of basic assets, risk prevention and control methods, product duration, and product structure of financial products.

For enterprises to obtain economic resources from the government, it is not all government subsidies. It may also be the government's capital investment in the company and government purchase services. One of the exceptions is in Article 5 of the "Accounting Standard 16-Government Subsidies". In paragraph 1, Specifically, "The economic resources obtained by an enterprise from the government are closely related to the sale of goods or the provision of services by the enterprise, and are the consideration or part of the consideration of the goods or services of the enterprise. Relevant accounting standards, such as Enterprise Accounting Standard 14-Revenue, are applied. "For enterprises to obtain economic resources from the government, it is not all government subsidies. It may also be the government's capital investment in the company and government purchase services. One of the exceptions is in Article 5 of the "Accounting Standard 16-Government Subsidies". In paragraph 1, Specifically, "The economic resources obtained by an enterprise from the government are closely related to the sale of goods or the provision of services by the enterprise, and are the consideration or part of the consideration of the goods or services of the enterprise. Relevant accounting standards, such as Enterprise Accounting Standard 14-Revenue, are applied. "In other words, the state subsidy is actually similar to the government's purchase of new energy power from photovolt power stations. Its essence is the government's purchase of electricity products, not the fiscal transfer payment.
Since state subsidies are essentially the government's purchase of electricity products from photovoltaic enterprises, in the power trading relationship, photovoltaic enterprises have equal contractual legal status with the state financial department, and the government's payment obligations for power subsidies are subject to the Contract Law. Administrative power may not be relied upon to unilaterally waive or circumvent one's obligations. Although the current subsidy default is a persistent disease in the industry, based on the fact that state subsidies are the basic nature of power sales, financial institutions should have certain confidence in the availability and relief of state subsidies when designing financial products.