Cancellation of export tax rebates for photovoltaic products: A turning point of growing pains and rebirth for the industry.

The photovoltaic (PV) industry has recently been abuzz with a policy announcement: starting April 1, 2026, export tax rebates for PV products will be completely eliminated, and tax rebates for battery products will be phased out in two stages, first from 9% to 6%, and then to zero next year. This news has caused considerable anxiety among many small and medium-sized PV export companies, who fear rising costs and lost orders. However, an industry veteran with five years of experience in PV export trade sees things clearly. He states that while the policy may seem to create pressure, it is actually helping the industry address its problems. Only by moving away from low-price competition and overcoming trade frictions can the PV industry truly establish itself in the global market, which is ultimately a good thing in the long run. First, let’s clarify the policy: the government has actually allowed ample buffer time; it’s not a sudden, one-size-fits-all approach. Previously, the export tax rebate rate for photovoltaic products was 13%, which was reduced to 9% in December 2024. This time, it was officially announced that the rebate would be completely abolished on April 1st, with a three-month transition period. The adjustment for battery products is even more moderate, with a 3-point reduction this year before complete abolition next year, giving companies sufficient time to adjust prices and stock up. Moreover, the policy only adjusts the VAT rebate, while the consumption tax rebate remains unchanged. Its core purpose is clear: to remove the “crutch” of low-price competition and force the industry towards high-quality development. This person, with five years of experience in foreign trade, deeply understands this. He frankly admits that the photovoltaic foreign trade has become increasingly exhausting in recent years, the root cause being low-price competition, with export tax rebates becoming the “fuel” for this competition. Currently, China accounts for 83% of global photovoltaic module exports, with overcapacity already more than doubled. Many small and medium-sized enterprises lack both technology and scale, relying entirely on the 9% tax rebate to wage price wars. He cited an example from last year: when quoting module prices to European customers, his company, including a reasonable profit, quoted 1.2 yuan/watt, while competitors quoted 0.98 yuan/watt. Later, it was learned that the other party didn’t make money on the product itself, but rather relied on tax rebates to cover their losses, using the rebates as bargaining leverage. This vicious competition is extremely damaging to the industry. On the one hand, industry profits are squeezed to the extreme, leaving companies with no money for R&D and forcing them to operate in low-end production capacity. On the other hand, the low-price competition gives Europe and the US leverage to launch anti-dumping investigations under the pretext of “dumping,” with tariffs reaching nearly 50% at their peak. Many companies’ hard-won orders ultimately resulted in significant losses due to trade barriers. This foreign trade professional stated that in the past five years, three of his orders fell through due to anti-dumping duties, resulting in losses exceeding the shipping costs. This kind of cutthroat competition should have ended long ago. Canceling export tax rebates is the key to ending this low-price infighting. Without the “safety net” of tax rebates, small and medium-sized enterprises (SMEs) that rely on them for survival will either have to upgrade their technology and reduce costs or be eliminated by the market. Meanwhile, leading companies with technology and scale will no longer be forced to accept low-priced orders and can win orders based on product quality and power generation efficiency. The industry’s overcapacity will be rapidly cleared, prices will return to rationality, and companies will no longer compete on who offers the lowest price, but on whose TOPCon and BC cell efficiency is higher, and whose after-sales service is better. This is the healthy ecosystem that the photovoltaic industry should have. Besides ending the involution of competition, canceling tax rebates has another key benefit: significantly reducing trade friction and making foreign trade more stable. The China Photovoltaic Industry Association stated that some companies are transferring tax rebates to overseas customers, which is equivalent to using domestic fiscal funds to subsidize foreign markets. This not only results in lost profits but also makes them vulnerable to being identified as “subsidized dumping,” keeping the risk of trade friction high. This foreign trade professional deeply feels this; in recent years, investigations into photovoltaic products by Europe and the United States have never stopped, even targeting products manufactured in Southeast Asia. This year, the United States also launched an investigation into photovoltaic products from Indonesia and India, which is essentially targeting Chinese production capacity. After the tax rebate was cancelled, photovoltaic export prices returned to their true costs, and foreign countries no longer had grounds to accuse them of “dumping.” Companies no longer needed to expend energy dealing with trade investigations or repeatedly explaining tariff risks to customers; order delivery was more stable, which was far better than making a few percentage points of profit from tax rebates in the short term. For those in foreign trade, a stable market environment is far more important than temporary low-price orders. Some people worry that the cancellation of tax rebates will increase costs for businesses, thus reducing their export competitiveness. However, this foreign trade professional believes there’s no need for excessive anxiety; increased costs can be mitigated, and the resulting solutions are more competitive than relying on tax rebates. After the tax rebate was cancelled, the cost per watt of photovoltaic modules increased by approximately 0.08-0.1 yuan, resulting in a profit reduction of 46-51 yuan per 210mm module. However, this cost doesn’t have to be borne solely by the company. On one hand, global photovoltaic demand is still growing, and high-quality production capacity is in short supply. Companies can negotiate price adjustments with overseas customers, who are more willing to pay for stable and reliable products. On the other hand, leading companies can offset costs through technology. For example, LONGi’s HPBC cells are 5% more efficient than traditional products, and the cost can be reduced by 8% after large-scale production, so this slight cost increase is not a concern. More importantly, this will force companies to accelerate overseas factory construction, shifting from “Made in China” to “Global Manufacturing,” completely circumventing trade barriers. This foreign trade professional revealed that their company has already begun to lay out its plans in Southeast Asia, and many peers are following suit. LONGi has built a 1.6GW module factory in Indonesia, using the latest BC technology, while Jinko has production capacity in the United States and Vietnam, with a combined annual capacity of over 10GW. Overseas factory construction not only avoids tariffs but also saves on shipping costs. The impact of the cancellation of tax rebates is almost negligible. Moreover, local production and local delivery result in faster response times and access to local market subsidies, giving it an advantage over simple exports. In addition, the cancellation of tax rebates can reduce the national fiscal burden, allowing funds to be used more effectively. The photovoltaic industry now boasts world-leading technology and the world’s largest production capacity, with annual exports exceeding 500 billion yuan, and tax rebates alone accounting for nearly 10 billion yuan. Shifting these fiscal funds to support R&D in new technologies such as perovskite and BC cells, helping companies overcome technological bottlenecks, is far more valuable than subsidizing exports. After all, future competition in photovoltaics will be technological competition; only those with core technologies can hold the reins. Of course, short-term pain is inevitable, especially for small and medium-sized foreign trade enterprises. Those companies that only do OEM manufacturing, lack technology, and have no overseas channels will likely be eliminated—this is a necessary price to pay for industry upgrading. However, from another perspective, eliminating outdated production capacity will allow strong companies to secure more orders and invest more funds in R&D, enabling the entire industry to develop upwards. This foreign trade professional also shared practical methods for coping with the transition period: First, seize the three-month window of opportunity to stock up, and ship out all orders that can be fulfilled before April 1st to lock in existing tax rebates; second, communicate with existing customers as soon as possible to adjust prices, frankly explaining cost changes. High-quality customers value stable supply and will not be lost due to reasonable price increases; third, expand into emerging markets. Europe and the Americas have many trade barriers, while the Middle East and Africa have rapid demand growth and are less price-sensitive, allowing for risk diversification. The changes in photovoltaic foreign trade in recent years have been significant. Previously, the conversation revolved around “What price are you offering?”; now, the conversation focuses on “What is your TOPCon production capacity?” and “How is your overseas factory construction progressing?”. Previously, winning orders relied on price reductions; now, it relies on technical solutions, delivery capabilities, and after-sales service. The cancellation of export tax rebates will accelerate this positive transformation, shifting the photovoltaic industry from “competing on scale and price” to “competing on technology and brand.” In fact, every policy adjustment in the photovoltaic industry over the past decade has driven its upgrading: from early subsidies to grid parity to break free from subsidy dependence, and now to the cancellation of export tax rebates, each step has propelled the industry from policy dependence to global competition based on its own strength. Now, China’s photovoltaic technology and industrial chain are among the world’s best, and it no longer needs tax rebates to maintain its competitiveness. The cancellation of tax rebates simply removes the “protective umbrella,” allowing truly capable companies to stand out. This foreign trade professional concluded by saying that in his five years in photovoltaic foreign trade, his biggest fear is not policy adjustments, but rather disorderly infighting and constant trade frictions within the industry. While the cancellation of tax rebates will indeed require bearing costs and adjusting customers in the short term, it will be a rebirth. With industry profits returning to reasonable levels and trade frictions decreasing, everyone can focus on R&D and service, which is the foundation for the long-term development of photovoltaic foreign trade. Therefore, he sincerely believes this is a good thing. The future of the photovoltaic industry should not be about grabbing orders with low prices through tax rebates, but about leading the world through technological innovation; the future of photovoltaic foreign trade should not be about price competition, but about service, solutions, and global expansion. The cancellation of tax rebates is not the end, but a new starting point for the high-quality overseas expansion of the photovoltaic industry. Finally, I’d like to ask everyone, how much impact do you think the cancellation of photovoltaic export tax rebates will have on small and medium-sized photovoltaic foreign trade enterprises? Do you believe in the development path of the photovoltaic industry relying on technological breakthroughs? Feel free to share your thoughts in the comments section.