Municipal solid waste in China has increased rapidly in recent years with urbanization and economic development. The establishment of affordable, effective and truly sustainable waste management is a key point for the development of urban areas. However, as a renewable energy, the cost-benefit of supporting and the environmental performance for waste incineration power are seldom discussed. This paper discusses the current situation of waste incineration power industry in China and analyzes the required subsidies and emission reductions. The results show that waste incineration power needs relatively less financial support and perform well on emission reduction. Main obstacles to the development of waste incineration have also been investigated from the perspective of government, enterprises and local residents. Lastly, some suggestions are offered on how to tackle these issues. For instance: more regulation on waste classification; to integrate the informal workers into formal municipal waste management system; to communicate more effectively to the public to dispel general misunderstanding; application of the waste heat from cogeneration plants to local heat supply or central heat supply system.