Chinese Ministry of Finance has restarted subsidies for LED industry. It’s reported that the total subsidy could reach 1 billion, and 30 to 50 bid winners can benefit from it.

Early in February, China launched a program to subsidize the LED industry for products including indoor downlight LEDs, reflective self-ballasted lamps, outdoor LED streetlights, and tunnel lamps. However, due to the quotes prices from some companies were considered unreasonable, the program was halted.

And in May, China launched new policy to promote energy-saving lighting and LED lighting, and 2.2 billion was arranged for new subsidies, the LED industry subsidy program was restarted.

Bidding companies' are required to have a capacity of at least 200 thousand pieces in downlight series and reflective self-ballasted lamp, or 30 thousand pieces in streetlight and tunnel light series , with minimum registered capital of 50 million Yuan. The subsidies would be deducted from the contract price negotiated by bid winners and government, so consumers would directly benefit from the program.

NDRC (National Development and Reform Commission) has shown that China subsidized energy-saving lighting with 280 million Yuan in 2008, rallying 650 million Yuan in market demand.

Liu Liang, an analyst at Industrial Securites has pointed out that subsidies for LED industry would have similar effect, and the industry chain will benefit from the policy. While the general lighting market, which includes lighting sales, manufacturing, and home appliances, would also be stimulated. China was reported excessive production capacity in LED industry, the program will especially ease pressures from high inventory in LED chips.