CORRECTED-China pledges further support for solar industry

Thu Jan 9, 2014 5:42am EST

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(Removes reference in Jan 4 story to JA Solar Holdings Co Ltd in eighth paragraph)

SHANGHAI Jan 4 (Reuters) - China pledged further support support for its ailing solar power industry on Saturday as the government seeks to revive a sector struggling with overcapacity and falling prices.

The State Council, China's cabinet, said in July that the country aimed to more than quadruple solar power generating capacity to 35 gigawatts by 2015 in an apparent bid to ease a glut in the domestic solar power industry.

The State Council, in a statement published on its website, said the Ministry of Industry and Information Technology was taking measures to "promote the healthy development of the photovoltaic industry".

The ministry, it said, was implementing the July directive by supporting consolidation in the industry, drafting guidelines for mergers and acquisitions and promoting standardisation.

It said the ministry was encouraging technological innovation, especially related to decentralised solar power installations not connected to the power grid. It was also supporting research and development efforts for batteries that can store solar electricity.

The ministry sought to improve standardisation and ensure "orderly competition" in the industry, the statement said.

The State Council said the solar industry had enjoyed a recovery in 2013. Total installed solar power generating capacity increased by around 8 GW, of which 6 GW were in power plants and 2 GW were in decentralised instillations, the statement said, citing preliminary estimates from the China Photovoltaic Industry Alliance.

Still, Chinese solar equipment producers like LDK Solar Co Ltd are teetering on the edge of bankruptcy.

China's support for its solar industry has been a source of trade friction. The United States and European Union have accused China of dumping underpriced solar panels on foreign markets and China has responded with anti-subsidy duties of its own. (Reporting by Gabriel Wildau; Editing by Ron Popeski)

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