Photovoltaic Export Tax Rebate To Be Cancelled, Sales Rush To Secure Orders

On January 9, the Ministry of Finance and the State Taxation Administration issued the Announcement On Adjusting Export Tax Rebate Policies For Photovoltaic And Other Products, stating that the value‑added tax export rebate for photovoltaic products will be abolished effective April 1, 2026. This decision signals the end of the era of tax‑rebate subsidies for the photovoltaic sector.

Export tax rebates refund the VAT paid by exporters domestically to avoid double taxation in overseas markets and to enhance international competitiveness; China has implemented such rebates since 1985. The current VAT rebate rate for photovoltaic products stands at 9%. On November 15, 2024, the Ministry of Finance and the State Taxation Administration announced that the rebate rate for photovoltaic products would be reduced from 13% to 9% starting December 1, 2024.

Industry researcher SMM assessed that, with a clear cancellation date now set, photovoltaic products—particularly modules—will bear the brunt of the impact. The primary consequences are higher direct costs for exporters and diminished price competitiveness. SMM photovoltaic analyst Zheng Tianhong estimated that for a 210R module, export profit would decline by RMB 46–51 per unit, compressing exporters’ gross margins and raising export costs.

The China Photovoltaic Industry Association observed that since 2024 Chinese photovoltaic exports have faced intensifying cut‑throat competition overseas, with export prices persistently falling in a “volume up, price down” pattern. Some exporters have not only competed on price but also treated the rebate amount as additional bargaining room, effectively transferring fiscal funds intended to offset domestic VAT burdens to foreign buyers during price negotiations.

That practice has, in effect, turned the rebate into a subsidy for overseas end markets, eroding domestic firms’ profits and materially increasing the risk of anti‑subsidy and anti‑dumping disputes. The association argued that reducing or cancelling export rebates at an appropriate time can help restore rational pricing abroad, lower the risk of trade frictions, ease fiscal pressure, and enable more efficient allocation of public resources. While rebate adjustments are not a panacea for the broader problem of domestic overcompetition spilling overseas, the association said the move should help slow the rapid decline in export prices and reduce the likelihood of trade disputes over the longer term.

For photovoltaic manufacturers, the first quarter represents a valuable window to accelerate exports. A frontline module maker told Times Finance that order‑grabbing is expected in the period leading up to the rebate cancellation. Indeed, signs of a scramble emerged immediately after the announcement: a photovoltaic distributor reported that limited branded module inventory sold out in under five minutes, with slower payments resulting in competitors securing the stock.

This rush to export may temporarily lift operating rates and capacity utilization. A module factory in Anhui told Times Finance that current utilization is generally low, so the near‑term demand surge is beneficial; the company reported that about 95% of its orders are directly or indirectly for export and expects a notable increase in export orders before April. The source added that new overseas orders may take roughly two weeks to materialize, so immediate effects on production scheduling are limited. The firm plans to extend production runs before the Spring Festival to maintain momentum and may add night shifts after the holiday to raise output, while placing greater emphasis on overseas market development in the spring.

A representative of Jinko Solar (688223.SH) told Times Finance that short‑term operating rates are likely to rise to match phased overseas demand, and that the company’s integrated production footprint in Vietnam will further strengthen its cost advantages. Industry participants also reported that some previously idled photovoltaic lines have resumed production to capture potential March export opportunities.

SMM’s Zheng Tianhong noted that ahead of the April 2026 rebate cancellation, overseas buyers are likely to accelerate orders during the window period, driving a sharp short‑term increase in module exports. Recent months have seen weak demand and impaired price transmission across the domestic supply chain, exacerbating losses; the rebate window could therefore support higher module scheduling, alleviate pessimism across the industry chain, and help prices adjust as overseas TOPCon module prices rise and end‑customer acceptance improves.

InfoLink data on January 8 showed that overseas TOPCon module average prices rose to USD 0.089 per watt. In Europe, silver‑linked price adjustments pushed project module prices to USD 0.86–0.90 per watt, with an adjusted module average price of about USD 0.087 per watt. InfoLink reported that module manufacturers have generally raised their 2026 pricing strategies for overseas orders.

Upstream, contacts at cell and module suppliers indicated that prices for cells and silicon have increased by roughly 3%–10%, but actual transactions remain limited unless sold at prior price levels. The Anhui module factory observed that recent rises in silicon and silver costs over the past month have been substantial and that the market has not yet fully absorbed these increases; it expects modest short‑term module price fluctuations but no large average increase.

Looking further ahead, Zheng Tianhong warned that after the rebate cancellation in April 2026, module export volumes could decline materially—by an estimated 5%–10%—and overseas demand may contract noticeably. Exporters’ gross margins are expected to narrow, and cash‑flow pressures could become a significant subsequent risk. While the rebate change will affect supply‑chain segments unevenly, in the short term the window period may relieve industry losses; over the longer horizon, reduced export volumes are likely to accelerate technological upgrading among Chinese firms and the exit of outdated capacity.