(Photo : Solar energy)

In a bid to improve the quality of air in the major cities of the country, Chinese government had announced to reduce subsidy on power that will result in hike in power tariffs from September 25.

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The government's move is aimed at generating more funds for providing subsidies in renewable energy sector. However, the Chinese government will exclude residential and agricultural sector from the power tariff hike.

China's National Development and Reform Commission (NDRC) said that the government is following international standard of subsidizing the renewable energy sector as the cost of renewable energy is very high.

Now, the consumers will have to pay 0.015 Yuan (0.0024 US cents) as additional surcharge for clean energy as compared to prevailing 0.008 Yuan (0.0011 US cents) per kilowatt-hour.

China had started levying charge on power in 2006 to build funds to provide subsidies in renewable energy sector and the NDRC is hoping to collect an additional fund of 20 billion Yuan (3.24 billion US dollars) after the hike power tariffs.

Chinese government was facing shortage of funds for renewable energy sector due to immense growth in the clean energy area in recent years and the government was pegging a shortfall of 33 billion Yuan in 2015 that was reported at 10.7 billion Yuan in 2011.

Meanwhile, the NDRC has claimed that retail prices of power will not be affected by the cut in the subsidy as the additional surcharge will be levied at wholesale levels.

In recent years, Chinese government was facing flak from general public on declining quality of air that is causing various diseases with children growing up with asthma and other respiratory diseases.

Four major cities of China that includes Beijing, Shanghai, Guangzhou and Xi'an has PM level (particles with an aerodynamic diameter less than 2.5 μm) more than the air quality guidelines, set by the World Health Organization.