The "tax rebate bonus" for solar panel exports has ended! How will the market evolve?

    In a significant policy shift, China's Ministry of Finance and State Taxation Administration have officially announced the phasing out of value-added tax (VAT) export rebates for photovoltaic (PV) products. According to the announcement, the VAT export rebate for PV modules will be fully terminated starting April 1, 2026. Additionally, the rebate rate for PV cells will be reduced from 9% to 6% from April 1 to December 31, 2026, before being completely abolished from January 1, 2027.

    The move is expected to have immediate and far-reaching impacts on the global solar industry, given China's dominant position as the world's largest PV exporter, accounting for nearly 85% of global module production.

Key Impacts:

    Increased Export Costs: With the removal of the rebate, manufacturers will face higher export costs. It is estimated that the profit per 210R module could decrease by approximately 46–51 RMB, squeezing export margins and reducing profitability.

    Reduced Price Competitiveness: The policy is likely to drive up global PV module prices, weakening the cost advantage that Chinese products have enjoyed in international markets.

    Renegotiation of Overseas Contracts: Chinese exporters are expected to renegotiate pricing terms with overseas clients, potentially passing on some of the increased costs to buyers.

    Accelerated Industry Consolidation: Higher export costs and anticipated price increases abroad will intensify competition, likely accelerating the exit of low-efficiency capacity. Leading companies with technological and scale advantages, such as those producing BC and TOPCon 3.0 modules, are positioned to gain market share.

Short-Term vs. Long-Term Outlook:

    Short-Term (Pre-April 2026): A surge in overseas orders is anticipated as buyers stock up ahead of the rebate cancellation. This could boost module production, alleviate recent oversupply pressures, and help stabilize prices amid current weak demand.

    Long-Term (Post-April 2026): Module exports are projected to decline by 5–10%, with overseas demand expected to soften. Reduced profit may strain corporate cash flows, though the shift could also curb price undercutting and encourage innovation.

Positive Structural Shifts:

    The policy change is also seen as a catalyst for long-term industry upgrading:

    Reduced reliance on low-price competition may foster greater focus on technology and brand development.

    It could help mitigate trade friction with key markets such as the EU, U.S., and India, lowering risks of anti-dumping investigations.

    Chinese manufacturers are likely to accelerate overseas production deployments in regions like Southeast Asia, the Middle East, and Latin America, while retaining core technology within China to navigate trade barriers.

    While the end of export rebates presents near-term challenges for Chinese PV exporters, it is expected to drive technological advancement, improve industry profitability over time, and reinforce China's leadership in the global solar value chain through higher value-added products and strategic international expansion.