Notice of the General Office of Shanghai Municipal People’s Government on Transmitting the Provisions on Promoting the Development of Shanghai New Energy Industry Formulated by the Municipal Development and Reform Commission and the Municipal Economic Information Commission

(December 7, 2009)

　　　　　　　                                       SMPG GO G [2009] No.54

Attention: All District and County People’s Governments, all Commissions, Offices and Bureaus (administrations) of the Municipal People’s Government:

The Provisions on Promoting the Development of Shanghai New Energy Industry formulated by the municipal development and reform commission and the municipal economic information commission have been approved by the Municipal People’s Government. We hereby transmit them to you, and request you to implement them conscientiously.

Provisions on Promoting the Development of Shanghai New Energy Industry

With a view to carrying out the Renewable Energy Law, the Opinions on Further Pushing Scientific and Technical Innovation and Accelerating High-Tech Industrialization made by the Municipal Party Committee and the Municipal People’s Government, and the Opinions on Implementation of the Quicker Pushing of High-Tech Industrialization made by the Municipal People’s Government, optimizing the innovation and development environment of Shanghai new energy industry, enhancing the innovative capacity and industrial competitiveness of Shanghai new energy industries and driving Shanghai new energy industry to become the key field of supporting and bringing on economic development, the following provisions on promoting the development of Shanghai new energy industry are hereby formulated in accordance with relevant laws, regulations, and policies: 

I. Fixing the key supporting fields and objectives

These Provisions apply to enterprises and institutions that have industrial and commercial registration and taxation registration in this Municipality and engage in the research, development, production and application in such fields as nuclear power, wind power, solar power, IGCC electricity generation and intelligent power grid.

II. Specifying the principle of development and application

Based on Shanghai’s actual circumstances in resources, industries, science and technology, and cost, Shanghai shall adhere to the principle of “setting foot on long term, making overall consideration and planning, conducting high-end manufacture and differential competition” with respect to the development of new energy industry and the manufacture of equipment, and adhere to the principle of “guiding the level, demonstrating the trend, boosting the fabrication and gradually popularizing the fruit” with respect to the development and application of new energy.

III. Actively supporting the development of new energy equipment manufacturing

1. Formulating policies on the first-set. Support eligible wind-turbine manufacturing enterprises with Chinese investment or with Chinese holding investment to apply for financial subsidies set by the state policy on the first-set under the Interim Procedures on the Management of Special Funds for the Industrialization of Wind Power Generation Equipment.    

Give financial support to pivotal installations such as the recognized first set of wind-driven generator, nuclear power generator, IGCC, thin-film solar cells and intelligent power grid. As for an extraordinarily important project, upon approval by the Municipal People’s Government, the subsidy standard may not be restricted by the maximum of subsidies.

2. Setting up special-purpose funds. The special fund established in this Municipality for major projects of the independent innovation and the development of high-tech industries shall chiefly support enterprises in carrying out major projects of high-tech industries, research and manufacture of key technological equipments, R&D of important common linchpin technology and public service platform in the new energy fields.

As for a major project of high-tech industrialization, the supporting proportion of special funds generally does not exceeds 10 percent of the newly-added total investment of the project, and for a research and manufacture project of major technological equipment, R&D of important linchpin technology and public service platform, not exceed 30 percent of the newly added total investment of the project. The support is given specifically through the modes of capital fund, loan interest discount and investment subsidy. As for an extraordinarily important project, if the supporting proportion of special funds needs to exceed the upper limit of the above-mentioned proportion or needs to take a special supporting mode, further approval shall be obtained from the Municipal People’s Government before confirmation.

3. Encouraging technical innovation. A high-tech achievement translating project with recognized independent IPR owned by a new energy enterprise shall be given financial support for its R&D, under relevant provisions, from this Municipality’s special fund for high-tech achievement translation.

A project of a new energy enterprise concerning the mere introduction of technology and production machine tools and other equipment to raise its core competitiveness, or a project concerning the acquisition and merger of an overseas enterprise or a R&D institution with core technology as well as holding relatively controlling shares shall be given financial aid under relevant provisions of this Municipality.

Support and encourage new energy enterprises to apply for domestic and overseas patents for their absorbed and innovated technologies. In respect to the patent right of invention obtained from foreign countries, this Municipality’s IPR department shall grant not more than 30,000 yuan to subsidize each piece of patent right applied for in a particular foreign country (not more than three countries); in respect to an enterprise applying for the domestic patent, subsidies shall be granted according to the actual payment of patent application fees; in respect to obtaining domestic invention patent rights, the actual examination fees, authorization fees and the annual fees in the second and third years after the authorization shall be subsidized according to the actual payment. 

4. Give policy-related support on taxation. Support eligible new energy enterprises in applying for the recognition of national high-tech enterprises and service enterprises with advanced technology. A recognized high-tech enterprise’s income tax shall be levied at a tax rate of 15 percent by reduction. In the period from January 1, 2009 to December 31, 2013, the income tax of the eligible service enterprises with advanced technology shall be levied at a tax rate of 15 percent by reduction. Employees’ educational outlay of a service enterprise with advanced technology shall be deducted according to not more than 8 percent of its actual payroll before the income taxation. The income of a service enterprise with advanced technology from its outsourcing business of offshore service shall be exempted from business tax

The R&D expenses incurred by a new energy enterprise for developing new technologies, products and techniques that have not been charged to the current loss and profit as intangible assets shall be deducted at another 50% of the R&D expenses in addition to the deduction of the actual cost as regulated; in case of forming an intangible asset, such expenses shall be amortized at150% of the cost of the intangible asset.

The income gained by new energy enterprises or individual persons from businesses of technical transfer or development and the related businesses of technical consultation or service shall be exempted from business tax. In case of the technical transfer of eligible new energy products, the proceeds therefrom, in a taxation year, shall have the part within 5 million yuan exempted from the enterprise income tax; and the part exceeding 5 million yuan taxed at a 50% reduction.

In respect to a project of investment in a new energy enterprise which complies with the encouraged category under the “Catalogue of Industries, Products and Technologies to be Currently Encouraged to Develop with State Priority” and the “Guidance Catalogue of Foreign Investment Industries”, its imported equipment for self-use within the total investment, the technologies, auxiliary sets and spare parts imported along with the equipment under the contract shall be exempted from duties, except the goods listed in the “Catalogue of Imported Goods for Domestic Investment Projects Without Tax Exemption” and the “Catalogue of Imported Goods for Foreign-funded Projects Without Tax Exemption”.

5. Introducing high-end talent. Actively create conditions to introduce excellent leading talents and technical teams at home and abroad, and stress on carrying on the “thousand-person plan” for overseas high-level talents. The introduced persons may be given priority in settling Shanghai household registration and Shanghai residence permit. Appraisal and recognition shall be organized every year to reinforce financial support to leading talents and high-level professionals. 

In calculating individual income tax on salary income received by overseas students who are engaged in new energy high-tech translation project in Shanghai, additional deduction may be made as provided. Salaries of foreign experts employed by new energy high-tech enterprises and scientific research institutes and such other employers may be charged to cost.

Establish a cooperation mechanism among enterprises, universities, and research institutes, and strengthen the training of talents in the new energy field in such ways as “cooperation between schools and enterprises”. Support higher learning institutions and scientific research institutes in building research bases and innovation platforms in the new energy field, and support higher learning institutions where conditions permit in setting up relevant disciplines and specialties in the field of new energy.

In exercising the corporation system in the ownership transformation, the state-wholly-owned high-tech enterprise in the new energy field may, according to provisions, take a part of not more than 35% of the increment from the state net assets increment as shares to reward enterprise backbone personnel who have made contributions

6. Boosting financial support. Establish the local government guidance fund for career-starting investment according to relevant state requirements to guide social capital to increase investment in career-starting enterprises in the new energy field with the help of the leverage effect of fiscal funds. Explore the establishment of professional career-starting investment enterprises in the new energy field, and gradually perfect a supporting mechanism beneficial to such enterprises’ investment in new energy industries.

Actively support eligible new energy enterprises in financing through domestic and overseas capital markets. Encourage new energy enterprises to enhance their innovation in the system and mechanism, make full use of current financial resources to further shift the operational mechanism and raise the industrial capacity level through multiple forms like strategic reorganization, merge and acquisition. 

Encourage and guide banking and financial institutions to further increase credit loan and financial services to new energy enterprises, strengthen communication concerning the information of major projects in the new energy industry, effectively lower the financing cost of new energy enterprises, raise the efficiency of credit examination and approval, and gradually establish an effective management mechanism for the financial sector to support the development of new energy industries.

7. Forming attraction for the establishment of enterprise headquarters. Encourage transnational new-energy enterprises to establish regional headquarters in Shanghai, and grant them preferential policies like financial aid and rewards according to the Provisions of Shanghai Municipality on Encouraging Transnational Corporations to Establish Regional Headquarters.

Formulate policies on attracting domestic enterprises to establish regional headquarters and R&D centers, and offer eligible regional headquarters and R&D centers of new energy enterprises with domestic investment, which are newly registered or newly moved into this Municipality, preferential policies like financial support, etc.

8. Constructing industrial bases. Support the district/county with proper conditions to construct new energy industrial bases, and encourage the bases to perfect the public infrastructure and build R&D, mid-testing, consulting and other public service platforms. The municipal, district/county people’s government shall give support in the aspects of funding, land, and personnel to the public construction and major project in such bases. The district/county people’s government may, according to local conditions, draw up specific implementation opinions and procedures on encouraging the development of new energy industry in its area.

9. Enhancing international exchanges and cooperation. Strengthen the cooperation with detection and attestation agencies with international authority, and establish in Shanghai the national-level detection and attestation centers for solar photovoltaic and wind turbine equipment. Encourage new energy enterprises to launch the international registration and marketing of their products, and support enterprises in passing IEC, UL, TUV, GL and other attestations with international authority. 

Build and form in Shanghai various platforms for the technical exchange and cooperation, standardization and training in the field of new energy. Give play to the role of intermediary service agencies, enterprises and public institutions, support the holding of exhibitions, displays and seminars of new energy technologies and products, introduce new energy technologies and products, and support services in relation to the technical consultation, engineering design and project management of new energy industries. Support new energy enterprises in drawing up related standards and give financial aid according to relevant provisions of the Procedures of Shanghai Municipality on the Management of the Special Fund for the Promotion of Standardization. Support new energy enterprises in cooperating with foreign agencies in organizing multi- trainings in technology, management, service and other relevant fields.

IV. Enhancing the development and application of new energy

1. Organizing the preparation of development planning. Encourage the development and utilization of new energy such as wind power and solar photovoltaic generation to constantly raise the proportion of new energy in the energy consumption structure. By 2012, under the planning, this Municipality’s wind-power generation shall have an installed capacity of 500 megawatts, with the key construction of “three-island” (Chongming, Changxing and Hengsha) land wind-power farms and “two-sea”(Lingang and Fengxian sea areas) sea wind-power farms, and solar photovoltaic power shall have an installed capacity of 50 megawatts.

2. Supporting the construction of applied projects. Bring major new energy projects into “green passage”, and give priority support in aspects of planning, land granting, environmental protection, infrastructure and other auxiliary facilities.

Under the premise of ensuring the anti-flood safety and such others, support the development and construction of wind-power and other new energy projects by utilizing offing and coastal tidal shoals and green pits inside seawalls. In case that a developing and utilizing project of wind power is in need of land use, the land requisition is made by the actual land area to be occupied, with construction-use land formalities completed according to the prescribed procedure.

Encourage public buildings and industrial structures that meet installation conditions to install large grid-integrated solar photovoltaic power systems. With respect to government-funded public buildings, the feasibility study report thereof shall have demonstrations for the feasibility of photovoltaic power system installation, and for those with installation conditions, the integration design must be conducted; the municipal administrative department of construction and transportation, housing administration shall, every year, arrange a batch of projects in combination with the work of energy-saving buildings.

Accelerate the construction of the supporting power grid. With respect to new energy power generation projects authorized by the municipal development and reform department, the supporting grid project shall be brought into this Municipality’s grid construction plan. The municipal grid enterprise shall accelerate the grid construction and reformation in combination with this Municipality’s demonstrative engineering of the intelligent grid, actively provide grid-integration conditions and ensure all new energy power goes into the grid.

Draw up relevant technical standards and rules in combination with BIPV development and utilization.

3. Giving policy support to the electricity pricing. Actively help enterprises strive for the most preferential electricity prices authorized by the State, according to the Trial-Implementation Procedures on the Management of the Pricing of the Electricity generated by Renewable Energy and Expenditure Apportionment formulated by the national development and reform commission. Before the State authorizes the pricing, assistance and support are given by adopting temporary pricing and other measures. 

Actively strive for the electricity surcharge policy from the national development and reform commission to establish special funds for supporting and assisting new energy power generation, and research for a mechanism to guide the pricing of electricity generated by new energy to enter the grid in line with Shanghai’s actuality.

The difference between the on-grid pricing and the generation cost of new energy power generation projects shall be digested by the green power fund, and the shortage shall be covered by the special fund for supporting new energy power generation. 

Further strengthen the publicity, advocate major energy-consuming units and resident users to buy “green power”, and thus establish the green power fund.

4. Actively striving to ensure the State’s and this Municipality’s fiscal subsidies. Support eligible new energy projects in applying for the special fiscal subsidies from the State and municipal finance according to the Interim Procedures on the Management of the Fiscal Subsidy Funds for the Application of BIPV, the Notice on the Implementation of Golden Sun Demonstrative Engineering, the Procedures of Shanghai Municipality on the Assistance and Support by the Special Fund for the Development of Renewable Energy and New Energy, and the Procedures of Shanghai Municipality on the Management of Special Supports for Energy Saving Buildings.

5. Supporting the application of new technologies and new products. Support new energy products with patent technology produced in this Municipality or those recognized by the State and Shanghai Municipality to be listed, in compliance with relevant provisions, in the “Catalogue of Independent Innovation Products in Shanghai”. Support fiscal funds to purchase the listed new energy products first. When the government supports construction and renovation of public buildings, priority shall be given to purchasing such new energy products. Build a batch of projects such as “experimental wind power farms” and “experimental photovoltaic power stations” for the demonstration of local new energy products.

These Provisions shall be interpreted by the municipal development and reform commission and the municipal economic information commission jointly with relevant departments. The relevant municipal departments may draw up specific implementation rules according to these Provisions and their work needs.

These Provisions shall be effective as of the day of delivery.

Shanghai Municipal Development and Reform Commission

　　                 Shanghai Municipal Economic Information Commission

November 11, 2009