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Home> News>Industry Information>Subsidies Are Not Omnipotent — Best Quality Hdg Solar Mounting System

Subsidies Are Not Omnipotent — Best Quality Hdg Solar Mounting System

From:Serve (Xiamen) New Energy Co., Ltd.     Release time:2019-01-21

Overview:In most cases, financial subsidies have enhanced the vitality of enterprises and helped them to survive the difficult period of pioneering undertakings lacking funds, talents and experience. They have achieved initial success and won the "first barrel of gold". Many researchers have pointed out that it is the loose fiscal and taxation policies adopted by the United States in dealing with low-yielding oil and gas fields, and the sustained support for natural gas research and production that are sufficient to maintain the long-term production of oil and gas in low permeability-tight reservoirs in the country, as well as the associated production increase research.

In most cases, financial subsidies have enhanced the vitality of enterprises and helped them to survive the difficult period of pioneering undertakings lacking funds, talents and experience. They have achieved initial success and won the "first barrel of gold". Many researchers have pointed out that it is the loose fiscal and taxation policies adopted by the United States in dealing with low-yielding oil and gas fields, and the sustained support for natural gas research and production that are sufficient to maintain the long-term production of oil and gas in low permeability-tight reservoirs in the country, as well as the associated production increase research. After a large number of new technology tests, the key technology of tight reservoir transformation and stimulation has been successfully achieved, the revolutionary breakthrough of oil and gas exploration and development has been realized, and the situation of paying equal attention to both conventional and unconventional oil and gas has been created.


However, it must be noted that many subsidies have failed to meet the above ideal situation.


If the amount of subsidies is too large and the time is too long, the effect may be counterproductive. This will make enterprises feel the pressure of the market and can survive on subsidies, leading to a weakening of competitive consciousness and a long-term lack of market competitiveness. This can only cultivate "greenhouse flowers" and will die in the face of wind and rain.


This phenomenon has emerged in the development of new energy in the EU. Under the impact of the financial crisis, when the government's economic difficulties can no longer afford so much money to subsidize, the new energy industry will inevitably decline. Spain has always boasted of taking the lead in new energy, but this has been achieved with high government subsidies, which increased from 193 million euros in 2007 to 8.1 billion euros in 2012. Even if part of it is passed on to consumers, the government will have to bear a cumulative deficit of 26 billion euros. The Spanish government can no longer afford to make up for the financial crisis. After cutting 5.6 billion euros in the previous two years, it cut its renewable energy subsidies by 2.7 billion euros in 2013. So far, there may be two situations: one is that the industry goes bankrupt; the other is that consumers will increase their electricity charges by another 40%. However, both of them make it more difficult for the governments in crisis to cope with the difficulties both at home and abroad.

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Under the tempting high subsidy, enterprises have the impulse to invest, without considering their technological level, rushing to compete for this "handy" benefit. Low-level production capacity has a superficial rapid growth, but it is very easy to cause overcapacity. One of its manifestations is that China's wind and solar power generation "has kilowatt (installed capacity) but no kilowatt-hour (output power)", which is very unstable power supply for the grid to accept and abandon, thus becoming the number one problem facing large photovoltaic power stations and wind power stations in China after the completion of the first problem. Especially when Europe and the United States imposed anti-dumping sanctions on Chinese enterprises, the whole industry was in a difficult position. Not only some small and medium-sized enterprises could not survive, but also some trump enterprises were forced to go bankrupt and restructure. The development policy of photovoltaic industry was facing major adjustment, and the industry had to shuffle.


What's more, high subsidies also induce many fraudulent actions, involving the new energy industry and some energy-saving projects in our country. One of the reasons for the success of such fraudulent subsidy is that the subsidy does not aim at scientific research projects to improve technological level and competitiveness of enterprises, but directly subsidizes the market with cash, especially for the planned production (energy-saving) capacity-building of enterprises, which gives the lawless a chance to take advantage of.


In many countries, politicians are popular for elections, and sometimes they can come to power or stay in power by making empty promises of subsidies. But empty words are not enough to fill the deficit, and the consequences of the fiscal deterioration are either eaten by themselves or swallowed by their successors. Venezuela, plunged into serious social unrest after Chavez, is facing the latter situation. In some countries, energy subsidies have been transformed into undercover subsidies to depress energy prices. However, as a result of the government's strong distortions of the decisive role of the market in the allocation of resources, the negative effects will inevitably increase and the losses caused by the price deficit will ultimately be borne by the society and the public. In this regard, some experts clearly pointed out that "low energy prices plus energy subsidies are a failed policy package for most practitioners".


About Serve Energy

Serve (Xiamen) New Energy Co., Ltd. is a Chinese manufacturer of low ballasted aluminum PV mounting system with independent intellectual property rights. Serve Energy specializes in the research and development, production, sales and services of solar products, such as top class cost-saving rooftop BIPV System for greenhouse, the best quality HDG solar mounting system, aluminum flat roof PV mounting system made in China, flat roof PV mounting systems procurement.


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