Cancellation of export tax rebates for photovoltaic products: an industry transformation with both challenges and opportunities.

At the start of 2026, the photovoltaic foreign trade sector was in an uproar—on January 9th, the Ministry of Finance and the State Taxation Administration issued an announcement clarifying that from April 1st, the export tax rebate for photovoltaic products would be completely abolished, with the rebate for battery products initially reduced from 9% to 6%, and then completely abolished in 2027. This news caused panic among many in the photovoltaic foreign trade sector, who feared rising costs and lost orders. However, some experienced foreign trade professionals saw this as a good thing: the industry should have been weaned off tax rebates long ago; the low-price competition propped up by tax rebates would eventually drag the entire industry down. Let’s clarify the policy: it wasn’t a sudden, sweeping change; it was pre-planned. Many people felt this policy adjustment was too sudden, but that’s because they didn’t understand the timing of the policy change. This cancellation of tax rebates is not a spur-of-the-moment decision, but the result of gradual optimization, giving companies ample buffer time. In November 2024, the export tax rebate rate for photovoltaic products had already dropped from 13% to 9%, at which time many companies realized that the days of relying on tax rebates to make profits were coming to an end. Now the policy is clear: starting April 1, 2026, tax rebates for 249 products, including photovoltaic modules and silicon wafers, will be completely cancelled; the reduction for battery products will be more moderate, initially by 3 percentage points, with a transition period of more than six months, before full cancellation in 2027. It’s important to note that the policy only cancels value-added tax (VAT) export tax rebates; if the product is subject to consumption tax, the consumption tax refund or exemption policy remains unchanged. Moreover, the effective date is based on the export date on the customs declaration, meaning there is a nearly three-month “window period” from now until the end of March, enough for companies to adjust orders and production plans—it’s not a sudden “cold shoulder.” The photovoltaic industry is no longer an “infant” needing subsidies. Now, more than 80% of the world’s photovoltaic products are made in China, with China’s technology and production capacity ranking first in the world. Relying on tax rebates to maintain low prices would only become a stumbling block to the industry’s development. Why is canceling tax rebates a good thing? Five years of foreign trade experience tells you the truth. Many people worry about rising costs and lost orders, but in our view, short-term pain for long-term healthy development is well worth it. Having worked in photovoltaic foreign trade for several years, I’ve seen too much outrageous price competition. Canceling tax rebates can precisely solve these persistent problems. First, it ends the bizarre phenomenon of “using domestic fiscal funds to subsidize foreign buyers.” The original intention of the tax rebate policy was to offset the VAT burden, but it gradually became distorted. Many companies directly converted the 9% tax rebate into price reduction space. For example, a module costing 1000 yuan could originally be sold for 1100 yuan, but to win orders, the price was directly reduced to 1050 yuan, giving the tax rebate profit to foreign buyers. The result of this vicious competition is that Chinese companies’ profits are as thin as paper, and the entire industry will suffer losses exceeding 31 billion yuan in the first three quarters of 2025, while foreign buyers reap the benefits. It’s equivalent to us using national fiscal funds to subsidize overseas markets. Now that tax rebates have been eliminated, all companies are on a level playing field. They can no longer rely on policy incentives to undercut prices and secure orders. Overseas market prices will gradually return to rationality, and companies can profit from their products themselves, no longer needing to engage in “loss-making” business. Secondly, it reduces trade friction and creates a more stable export environment. In recent years, European and American countries have frequently initiated anti-dumping and anti-subsidy investigations against Chinese photovoltaic products, citing “Chinese companies relying on government subsidies for low-price competition.” In 2025, China’s photovoltaic exports had already decreased by 13.2% year-on-year, with many companies’ orders blocked by tariff barriers. The government’s proactive cancellation of tax rebates is equivalent to telling the world: “Chinese photovoltaics do not rely on subsidies, but on technological and production capacity advantages.” This fundamentally reduces the risk of trade friction, freeing foreign trade professionals from constant worry about order investigations and goods seizures, leading to a more stable export environment. Thirdly, it eliminates inefficient production capacity, preventing the industry from becoming “involutionary.” The photovoltaic industry has long suffered from overcapacity, especially some small workshops that lack core technologies and rely entirely on undercutting prices to survive. The existence of these companies not only lowered the overall industry’s profits but also led to inconsistent product quality, impacting the international image of China’s photovoltaic industry. After the tax rebate is cancelled, these companies that rely on it for survival will face directly increased costs and squeezed profit margins. It is estimated that 30% of inefficient production capacity will be eliminated. This is good news for legitimate companies; with less competition, market share will concentrate on leading companies with technology, brands, and scale. Industry competition will shift from “price wars” to “technology and service wars,” gradually breaking free from the vicious cycle of “involution.” [Image of photovoltaic industry image 2] Foreign trade professionals, don’t panic! Three coping methods to smoothly navigate the adjustment period. While the cancellation of tax rebates is a long-term positive, short-term cost increases are a reality. As a foreign trade professional with five years of experience in the industry, I’d like to share some practical coping methods to help everyone transition smoothly. First, seize the window of opportunity and arrange orders rationally. From now until the end of March, there are nearly three months left, during which exported products can still enjoy a 9% tax rebate. Be sure to seize this opportunity. However, be careful not to blindly accept orders; arrange them according to your production capacity to avoid delivery delays. For battery companies, the buffer period is even longer; there is still a 6% tax rebate throughout 2026. There’s no need to rush; you can gradually adjust your order structure and negotiate prices with customers. Second, proactively discuss price increases with customers and reasonably share costs. Many foreign trade professionals are hesitant to raise prices for fear of losing orders, but overseas customers value a stable supply chain and product quality. As long as the reasons are sufficient, customers can accept reasonable price increases. When discussing price increases, be sure to provide data, such as how much the cost of each order has increased after the tax rebate was cancelled, so that customers understand that the price increase is not arbitrary but a reasonable cost transmission. Third, improve internal capabilities and shift from “price advantage” to “value advantage.” This is the most crucial approach. The era of relying on tax rebates and low prices is over. The future competitiveness of photovoltaic foreign trade will inevitably come from technology, brand, and service. Strong companies can consider building factories overseas. Leading companies like LONGi and Jinko have already begun establishing production capacity in Southeast Asia and the Middle East, producing and selling their products directly locally. This not only avoids the impact of China’s export tax rebate policy but also bypasses tariff barriers—a major future trend. For us in foreign trade, we must also improve our professional capabilities. We can no longer be just “quoting machines.” We need to be familiar with product technology, understand overseas market policies, and provide customers with complete photovoltaic solutions. Only in this way can we stand firm in the competition. Finally, to be frank: for the industry to grow, it will eventually have to “wean itself.” The cancellation of photovoltaic export tax rebates is like weaning a grown child. Although the process is painful, it will force companies to grow independently and learn to earn money through genuine skills. In the short term, some companies will face pressure and even be eliminated, but in the long term, the industry’s competitive order will be more standardized, corporate profitability will improve, and China’s international position in photovoltaics will be more solidified. As foreign trade professionals, we are full of confidence in the future. The era of competing on price is over; the era of winning through technology, brand, and service is dawning. As long as we proactively adapt to policy changes and hone our internal capabilities, we will surely be able to earn more and more stable profits in the new competitive landscape.