BEIJING (Reuters) - China has lowered government subsidies to demand-side solar power projects in 2012 from a year earlier as the construction cost for solar power system has declined, the Ministry of Finance said on Wednesday.

The government will now offer 7 yuan ($1.11) per watt, or $1,110/kilowatt, for demand-side photovoltaic power projects, the ministry said in a notice published on its website (www.mof.gov.cn)

In 2011, the government offered 9 yuan/watt for projects whose solar panels were made from crystalline silicon and 8 yuan/watt for panels consisting of thin-film noncrystalline silicon.

The government financed half of investment cost of demand-side solar projects when it announced the unprecedented initiative in 2009.

Beijing set unified grid feed-in tariff for supply-side solar power projects in August last year, a move leading to quick additions of utility-level solar power generating capacity.

The country's overall solar power capacity tripled to 3 gigawatts at the end of last year from less than 1 GW a year earlier, the head of the National Energy Administration has said. ($1 = 6.3085 Chinese yuan) (Reporting by Jim Bai and Chen Aizhu; Editing by Jacqueline Wong)