China’s industry ministry on Wednesday finalised investment guidelines for solar photovoltaic (PV) manufacturing projects in an effort to rein in overcapacity, according to a notice on the ministry website.

The guidelines direct companies to ensure a minimum capital ratio of 30% for solar PV projects. Previously, that standard applied only to polysilicon manufacturing projects while the minimum for other PV projects was 20%.

The ministry did not provide a definition of the ratio, which typically refers to the percentage of total investment shareholders invest with their own assets.

The rule, which also contains guidelines on efficiency and energy consumption, is not binding in project approvals, however.

It encourages local governments to rationally allocate manufacturing projects based on local resource endowment and industrial foundations.

The ministry said the guidelines were aimed at upgrading and structural adjustments in the PV industry.

The announcement follows a reduction in export tax rebates for solar components that analysts say would lead to slight price increases for overseas buyers as costs are passed on.

China’s solar panel manufacturers have been calling for the government to step in and curb over-investment in the industry that has led to a plunge in prices of solar cells and modules, but prices have remained stubbornly low.