China to scrap solar export tax rebates from April 2026, raising costs for e...

by MA Yueran

China will cancel value-added tax export rebates for solar products from April 1, 2026, a move expected to raise exporters' costs, lift global module prices and reshape competition in the world's largest photovoltaic supply chain.

The policy was announced on Jan 9 by the Ministry of Finance and the State Taxation Administration. Under the plan, export rebates for most photovoltaic products will be eliminated outright from April 2026. For battery products, the rebate rate will be cut to 6% from 9% between April 1 and Dec 31, 2026, before being fully removed from Jan 1, 2027. Export consumption tax policies will remain unchanged.

The decision follows earlier tightening. In November 2024, authorities reduced export rebate rates for solar wafers, cells and modules to 9% from 13%, effective Dec 1, 2024, signalling a gradual retreat from fiscal support for the sector.

Analysts said the latest move had been widely anticipated, but the scale of the cut exceeded some market expectations. BloombergNEF solar analyst TAN Youru told Jiemian News that China's solar manufacturers no longer rely on export rebates to compete globally, yet the shift from a 9% rebate to zero was steeper than market expectations for a cut to around 5%.

The impact on profitability could be immediate. ZHENG Tianhong, a senior solar analyst at Shanghai Metals Market (SMM), estimated that export profits on a standard 210R module would fall by 46–51 yuan per unit, compressing exporters' gross margins.

Higher costs are likely to be passed on to overseas buyers, pushing up global module prices and weakening part of China's low-cost advantage, Zheng said. He expects exporters to renegotiate prices as the policy takes effect, transferring much of the added burden to foreign customers.

Some industry participants view the move as a potential catalyst for easing cut-throat competition. A representative from Trina Solar told Jiemian News that a phased removal of export rebates, combined with stronger intellectual property protection, could help steer the industry away from price wars toward higher-quality competition, benefiting technology leaders.

Zheng said rising export costs and prices would likely favor brands with stronger technology and scale, while accelerating the exit of weaker capacity. He expects overseas buyers to pull forward orders ahead of April 2026, creating a short-term spike in exports ahead of April 2026, before volumes potentially decline by 5–10% after rebates are scrapped.

In a statement released late on Jan 9, the China Photovoltaic Industry Association said export rebates had increasingly been used as a pricing tool since 2024, with some companies effectively passing the fiscal benefit to overseas buyers rather than using it to offset domestic tax burdens. This, the association warned, had eroded profits at home and increased the risk of anti-subsidy and anti-dumping actions against Chinese solar products.

Industry data underscore the strain. Between January and October last year, China's exports of wafers, cells and modules rose 8.3%, 91.4% and 6% year on year, respectively, while export value fell 13.2% to US$24.42 billion, extending a two-year decline. Despite the price squeeze, China recorded year-on-year growth in module exports to more than 128 countries and regions, with the number of overseas markets exceeding one gigawatt in annual demand rising to 40, highlighting its continued dominance of the global solar supply chain.