China's top economic planner has issued a draft regulation showing lower-than-expected subsidies for distributed solar power projects, industry insiders said.

Distributed solar farms will received subsidies of 0.35 yuan ($0.05) per kWh, the draft issued by the National Development and Reform Commission, PV-Tech reported on March 10.

Meanwhile, the country has set four rates from 0.75 yuan to 1 yuan per kWh for solar-power plants in different regions to sell electricity to grid operators, according to the draft.

Industry insiders and analysts said the subsidy for distributed solar projects is below expectations, which indicates the authority's position to push forward industrial integration amid a supply glut.

The State Grid announced it would connect distributed PV solar power producers to the national grid free of charge in late 2012. The move was seen as offering a helping hand to the domestic PV solar industry, which has been suffering from high punitive tariffs from anti-dumping and anti-subsidies investigations against Chinese products from the United States and Europe.

Since October, the State Grid said it has received up to 119 applications for distributed solar projects with total generation capacity of 338,000 kW.

The company said that by the end of last year, there were 15,600 distributed power generation projects with total installed capacity of 34.36 million kW in China.