For a country that was one of the world’s largest producers of solar power in 2007—some sources even award it second place, after Germany—China’s actual solar installation record is far less impressive. Thanks to the cheapness and availability of traditional fossil fuels like coal, as well as the lack of clearly-defined solar PV policies, last year only two percent of the country’s solar-power output was used domestically. Considering its estimated continental solar power potential of 1,680 billion toe (or, 19,536,000 TWh) per year, this seems like a bit of a waste, doesn’t it? The Chinese government, a bureaucracy among bureaucracies, appears to have finally resolved to put the country’s rapidly expanding production capacities to use at home and taken a firm hand in guiding itself toward meeting its goal of having renewable energy account for 15 percent of its energy mix by 2020. According to the Wall Street Journal, it has announced that it will introduce a preferential tariff that will pay energy companies that use solar power for their generating capacity.

From the WSJ:

The preferential tariff — the price that China’s two state-owned electricity transmission and distribution companies will pay energy companies for their solar power — aims to make solar power competitive against traditional fuels, such as coal, which accounts for two-thirds of China’s electricity.

Shi Lishan, vice director of the National Energy Administration’s Renewable Energy Department, said the tariff will be 1.09 yuan (16 U.S. cents) per kilowatt hour for solar power that is supplied to the grid. Coal-fired power generation needs a tariff of just 0.3 yuan per kWh to be profitable.

Considering that China has long overtaken the US as the world’s largest emitter of greenhouse gases, this is definitely something to hurrah about. According to government officials, China will likely have 10 to 20 gigawatts of solar capacity by 2020, rising sharply from a previous target of 1.8 gigawatts. They’ve still got a whiles to go—as of 2008, total installed solar-power generating capacity was well below 0.1 gigawatts. However, as construction for the 2008 Olympics showed, if China sets its mind on a tangible, economy-boosting goal (and the potential for good PR is high), the results won’t stray far off-target.