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An Investigation of China's Subsidy Program for Energy-saving Products

Authors:
  • Top10 China

Abstract and Figures

Subsidy is used in many countries as an important instrument to promote energy-saving products. China started subsidizing energy-saving products, including light bulbs and automobiles, in 2009. The subsidized product groups quickly expanded to major home appliances such as air conditioners, flat- panel TVs, refrigerators, washing machines and water heaters. The latest subsidies for purchasing the five types of energy-saving products reached 26.5 billion RMB since June 2012. It is expected that even larger financial budgets from the Chinese government will be allocated to support the wide deployment of high energy efficient products according to the national 12th Five-Year-Plan, which adopted the "energy conservation and emission reduction" as the national long-term development strategy. In this paper, the policy framework of China's Subsidy Program for Energy-saving Products is reviewed. The recent subsidy schemes for air conditioners, flat-panel TVs, refrigerators, washing machines and water heaters are introduced. Based on retail market data, an investigation of the market status for the five types of products is conducted. The subsidy schemes are analyzed in terms of products' properties such as type, size, energy efficiency tiers, price, functional capacities etc. This paper concludes with suggested options to improve the subsidy program.
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In the last two decades, China, as the "world factory", has consumed more than 70% of their electricity on industries, in which around 75% was used by Electric Motor Driven Systems. In 2014, China ranked No. 1 by consuming 28.3% of the global electricity use on motor systems. According to the Energy Conservation Law (approved in 1997, revised in 2007, 2016), China launched a series of national policies and programs improving energy efficiency of electric motors and motor systems. From 2010 to 2014, China has developed six batches of catalogues for energy-efficient motors and subsidized them through a national financial incentive program called "Jienenghuimin" 1 [1]. In 2013, China launched a three-year National Motor Energy Efficiency Improvement Plan (2013-2015), aiming to deploy high efficient motors, eliminate inefficient motors and improve motor system efficiency, in which Minimum Energy Performance Standards (MEPS) and labelling schemes were improved, catalogues of Eliminated High Energy Consumption and Backward Mechanical and Electrical Equipment (incl. motors, compressors, fans, pumps and transformers) were updating, national training and regional system audit programs such as Topmotors China Zhenjiang Pilot [2] [7] were conducted. But due to multiple barriers, the motor system energy saving potentials in China were still not well tapped. With support of the Energy Foundation, Renergy Technology Consulting Beijing LLC has implemented a 1-year project "Mechanism Research & Policy Analysis on China Motor System Energy Efficiency Improvement", in which the existing policies and programs were reviewed and analyzed, barriers hindering motor system efficiency improvement in China were identified, and recommendations to improve the policies were made accordingly. In this paper, the key findings and results of this project are presented, including the development and harmonization of exiting MEPS, new development of China Energy Label (CEL) with QR code, related compliance and enforcement programs, analysis of the "Jienenghuimin" financial incentive program, as well as the barrier analysis for implementing Energy Efficiency Retrofit Projects both in Motor Users' and ESCOs' perspectives. In addition, lessons learned from the local level and financial sectors were summarized. This paper concludes with suggested options for improving motor system energy efficiency policies and mechanisms in China.
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