At the start of 2026, the Ministry of Finance and the State Taxation Administration dropped a bombshell: the government will no longer subsidize export tax rebates for photovoltaic (PV) and battery products. This is not only an adjustment to fiscal policy, but also a forced “weaning” of the new energy industry by the government. While this policy adjustment is drastic, it leaves room for maneuver. For PV, starting April 1, 2026, the export VAT rebate for PV products will be directly reduced to zero, with no buffer or leeway. The battery industry, however, will receive a nine-month “buffer period,” with the rebate rate dropping to 6% by the end of 2026, and not being completely eliminated until January 1, 2027. Simply put, the government no longer wants to use taxpayers’ money to subsidize the rooftops and electric vehicles of Europeans and Americans. In the short term, the “growing pains” brought about by this policy adjustment are unavoidable. Canceling tax rebates is equivalent to a direct 9% surge in photovoltaic export costs. For small and medium-sized enterprises with net profit margins of only a few percentage points, profits are directly emptied, and they may even have to pay out of pocket. Second- and third-tier manufacturers that rely on low prices and tax rebates will face extremely difficult times; cash flow disruptions and forced market exits will be the norm in the coming months. Before the April 1st deadline, a frenzy of “rushing to export” will inevitably erupt in the industry, with everyone rushing to ship as much as possible before the policy takes effect. However, in the long term, this drastic measure is well-timed. First, it ends the stigma of “selling off at rock-bottom prices.” Previously, to secure orders, companies undercut each other’s prices, even using tax rebates as leverage, drawing accusations of “dumping” from foreigners. Now that tax rebates are gone, no one can rely on low prices to win orders; prices have returned to rationality, allowing companies to sell at better prices. Secondly, it accelerates “global manufacturing.” Since there are no more tax rebates for exports from China, companies have no choice but to build factories overseas. This will force giants like LONGi and CATL to accelerate their production capacity expansion in Southeast Asia and Europe, transforming “Made in China” into “Made in the World,” achieving true globalization. Finally, the strong will get stronger. This is a brutal elimination process; the weak will be eliminated, and the strong will dominate. Industry concentration will increase significantly, and the photovoltaic and battery market will become a game for a few leading giants. 2026 will be the most brutal yet most hopeful year for the new energy industry. Having left behind the “greenhouse” of policy, the “real skills” honed by companies in the face of adversity are the true moat. This is a tough battle to shift from “scale expansion” to “high-quality development.” Whether these companies can remain on the beach after the tide recedes and become true leaders remains to be seen.
2026 New Energy Export Tax Rebate Adjustment: Short-Term Pain, Long-Term Rebirth
At the start of 2026, the government implemented significant adjustments to export tax rebate policies for photovoltaic (PV) products and batteries: the VAT export rebate for PV products was eliminated entirely, while the battery industry was granted a nine-month grace period. Although this policy shift will cause short-term "growing pains"—such as a sharp rise in costs—it will ultimately help curb cutthroat domestic competition, compel companies to expand into overseas markets, and drive high-quality development across the industry.
