China on Monday unveiled long-awaited benchmark solar-power tariffs that will make investment less risky and could boost domestic demand for solar panels.

Industry participants have long called for a nationwide standard solar-power tariff to give investors a better idea of future revenues than the case-by-case pricing regime now in place, under which companies frequently complain they don't know what they will earn until projects are already built.

China's National Development and Reform Commission announced that all new solar power projects approved after July 1 and projects on which construction will be finished after the end of this year will receive an on-grid tariff--paid by the country's two grid operators to the power generators--of CNY1 ($0.16) a kilowatt hour.

Solar projects that are completed before the end of this year or approved before July 1 will be paid CNY1.15/kWh, the nation's top economic planner said on its website.

"This is a positive development, in our view, as it reaffirms the central government's commitment to develop clean energy," Daiwa Capital Markets said in a research note.

"Our initial take is that total demand from China could reach 1.5 gigawatts in 2011 up from 532 megawatts in 2010," Daiwa said, although it noted that China 's expected demand for the year would represent only 7.5% of the world's total.

"CNY1 for future projects is a quite favorable rate as the costs for solar panels are falling," said a solar official with an international energy company, who declined to be named. "It can guarantee profits of 10%-15% for solar projects."

China aims to obtain 15% of its energy mix from non-fossil fuel sources by 2020, up sharply from around 8% currently, to cut pollution and reduce carbon intensity. The nation will likely target 10 gigawatts of solar capacity by 2015.

The nation also has plenty going for it in the solar field as it is home to some of the world's largest solar equipment companies including U.S.-listed Suntech Power Holdings Co. (STP), Yingli Green Energy Holding Co. (YGE) and Trina Solar Ltd. (TSL). Its thinly populated northern and northwestern regions are particularly suitable for construction of large solar panel farms.

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