The photovoltaic industry is experiencing a mandatory “withdrawal reaction.”
Starting from April 1, 2026, the export value-added tax rebate for photovoltaic products will be officially cancelled.
This is not an ordinary policy adjustment, but a key node for the industry to shift from “policy dependence” to “market drive” for more than ten years.
The diagnosis is clear: the industry has entered a deep liquidation period, and the competitive logic has completely shifted from “low-price involution” to “technology-driven”, and a structural reshaping has begun.
Laboratory test sheet: The profit of each component is reduced by 46-51 yuan, and more than 30% of the production capacity is facing elimination.
This is the most intuitive “test indicator” after the policy is implemented.
According to calculations by Shanghai Nonferrous Metal Network, taking mainstream 210R components as an example, canceling the 9% tax rebate is equivalent to a direct reduction of 46 yuan to 51 yuan in export profits for each module.
For the entire industry, the average profit margin has been as low as 3.64% in 2025. After the tax rebate is cancelled, it is expected that more than 30% of inefficient production capacity will be eliminated at an accelerated pace.
The impact is not evenly distributed.
This is an accurate “stress test”:
- Leading companies (such as Longi, Jinko, and Trina): With technology premiums (such as BC batteries, 210mm TOPCon components) and global production capacity layout (factories in Southeast Asia and the Middle East), they can pass on part of the cost to overseas customers.
For example, Trina Solar has adjusted prices by 8.5% cumulatively, and the overseas gross profit margin of some high-efficiency modules can reach 29%.
Although they also lose 5% – 8% of profits, they can absorb it through internal optimization. - Small and medium-sized enterprises: are facing an existential crisis.
For companies with gross profit margins generally lower than 10%, the cost per watt increases by 0.06-0.07 yuan, and export profits shrink by 9%-13%.
If it is unable to raise module prices by 9% to cover costs, it will face the risk of loss of orders and idle production capacity.
Companies that lack core technologies and have tight cash flow are likely to be merged or bankrupt in the next 12 to 18 months.
Cause diagnosis: The external cause is trade friction, and the internal cause is the abnormal pattern of “involution and externalization”.
The direct external reason for the policy adjustment is to reduce the risk of anti-dumping and countervailing investigations in Europe and the United States.
Tax rebates are easily recognized as indirect subsidies, and their cancellation will enhance my country’s defense power in international trade disputes.
But the deeper and more critical internal factor is the industry’s own distorted competition model.
In the past, some companies converted export tax rebates into external bargaining space and competed for overseas orders at prices lower than cost, leading to a vicious cycle of “volume increases and prices decrease.”
In 2025, the average export price of modules will be only US$0.095/watt. Financial funds have subsidized overseas buyers in disguise, and the entire industry has lost more than 31 billion yuan.
This “involution and externalization” model not only causes companies to lose profits, but also delays the exit of backward production capacity, preventing the industry from entering a healthy development track.
The cancellation of tax rebates is precisely to puncture this “bubble” that relies on subsidies.
Treatment and transformation: Technology has become the only prescription, and the overseas business model has completely changed.
The prescription has been written, and companies must completely transform from two dimensions.
First, the core of competition has shifted from price to technical efficiency.
As of the end of 2025, the domestic N-type cell market accounted for more than 96.9%, of which TOPCon technology accounted for 82.8%, and P-type technology was basically cleared.
Leading companies are making every effort to build technical barriers:
- Longi Green Energy has built a four-layer protection system of “patent + collaborative innovation + confidential design + personnel management” for BC back contact batteries to extend the window of technological leadership.
- Cost reduction technologies such as “less silver” and “no busbar” have become the focus to cope with the rising cost of silver paste.
Second, globalization has upgraded from “exporting products” to “exporting production capabilities and solutions”.
The model of simply selling components is unsustainable, and localized production and comprehensive services have become new solutions.
- Exporting production capacity overseas: About 30 Chinese photovoltaic companies have deployed production capacity overseas, with a total scale of 26.6GW of silicon wafers, 61.45GW of cells, and 73.65GW of modules.
For example, JinkoSolar’s bases in Southeast Asia are operating at full capacity, directly avoiding the impact of tariffs and tax rebates. - Market differentiation: Direct exports to the United States declined, but exports to ASEAN increased by 29.4%, and exports to Africa increased by nearly 50%. Emerging markets became the main force of growth.
- Role change: Enterprises are shifting from equipment suppliers to “comprehensive energy service providers”, providing customers with a complete set of solutions such as optical storage integration and operation and maintenance optimization.
Energy storage has become an explosive growth point. Overseas energy storage orders from photovoltaic companies will exceed 40GWh in 2025, and LONGi Green Energy’s energy storage target shipments in 2026 will reach 15-16GWh.
Prognosis: It is not a decline, but a necessary pain to move towards high-quality maturity.
Taken together, this is not a structural decline in the industry, but a mature and dramatic phased adjustment.
The prognosis can be graded:
Under what circumstances will the industry continue to be under pressure?
If small and medium-sized enterprises cannot complete technology upgrades or bind leading supply chains within the window period, they will exit in batches.
At the same time, if the project rate of return (IRR) in overseas emerging markets falls below the threshold due to rising component prices, short-term demand may fluctuate.
Under what conditions will the industry recover and develop more healthily?
When backward production capacity is cleared, market concentration increases (the share of leading companies is expected to rise from 80% to more than 90%), competition returns to rationality, and technology premiums become the main source of profits, the industry will enter a new stage of “high quality and stable prices.”
At the same time, domestic policies such as “industrial green microgrids” will stimulate demand for distributed photovoltaics and energy storage, forming new support for domestic demand.
As Wang Bohua, consultant of the China Photovoltaic Industry Association, said, saying goodbye to tax rebate bonuses and moving into market-driven development should be the only way for the photovoltaic industry to mature.
After the pain, leading companies with technology, brand and global layout capabilities will lead a new pattern of the global photovoltaic industry that is more sustainable and stronger.
