China's photovoltaic industry bids farewell to export tax rebate dependence and enters a new stage of high-quality development

Ask AI · How does the cancellation of export tax rebates drive innovation and upgrading in the photovoltaic industry?

China.com.cn Finance and Economics, April 1: Effective April 1, 2026, VAT export tax rebates on products such as photovoltaic (PV) will be officially canceled, ending the industry’s “tax rebate reliance” that has lasted for years.

Industry insiders believe that although this adjustment to the tax rebate policy may, in the short term, increase export costs for related products, in the long run it will push companies to shift from “low-price involution” to competing on higher quality and higher value-added, helping China’s photovoltaic industry build more sustainable competitiveness in the global market.

**　　Timely adjustment of export tax rebates for photovoltaic products**

Export tax rebates refer to a system that exempts and refunds VAT and consumption tax collected in domestic links for exported goods. This system complies with WTO rules and is a widely used international practice.

For a long time, China has applied export tax rebate policies to most products, and has adjusted them as needed in accordance with economic and social development requirements.

In January of this year, the Ministry of Finance and the State Taxation Administration issued an announcement, clarifying that effective April 1, 2026, export VAT tax rebates on products such as photovoltaic will be canceled, and VAT export tax rebates on battery products will be phased out over two years.

Li Xianzhong, Director of the Integrated Affairs Division of the Ministry of Finance, said at the Jan. 20 press conference held by the State Council Information Office that this is “a further policy adjustment made in light of China’s actual situation” on the basis of lowering export tax rebate rates for photovoltaic, batteries, and other products in late December 2024 (from 13% to 9%).

After years of sustained development, China’s photovoltaic industry has grown from small to big and from big to strong, and has become a strategic emerging industry with end-to-end global leading advantages. According to data from the China Photovoltaic Industry Association, in 2025 China’s polysilicon, silicon wafers, cells, and modules capacity accounted for 96.0%, 96.2%, 91.3%, and 80.1% globally, respectively, and the photovoltaic industry chain holds a dominant position worldwide.

Some analysts believe that canceling export tax rebates for advantageous industries helps allocate fiscal resources more efficiently, use government funding at key development points and where the public most urgently needs it, and enable fiscal funds to achieve greater effectiveness.

**　　Avoid “involution going outward” **

In recent years, China’s photovoltaic industry has achieved leapfrog development in scale, technology, markets, and applications, and its global leading advantages have continued to be strengthened. But while affirming achievements, it is also necessary to remain clear-minded that the industry is currently in a deep adjustment period, and the contradiction arising from a mismatch between supply and demand has not yet been resolved; “involution-style” competition still needs to be addressed.

In its interpretation of the new export tax rebate rules, the China Photovoltaic Industry Association said that since 2024, China’s photovoltaic products in overseas markets have faced increasingly fierce malignant competition. Export prices have continued to fall, showing a trend of “increasing volume while decreasing unit prices.” During the export process, some companies not only competed on low prices, but also converted the export tax rebate amount into negotiation leverage for overseas buyers. As a result, fiscal funds that were originally meant to offset domestic VAT burdens were ceded to overseas purchasers in the negotiation process. This not only causes a loss of profits for domestic companies but also increases the risk of trade frictions.

The China Photovoltaic Industry Association believes that reducing or canceling export tax rebates for photovoltaic products in a timely manner will help overseas market prices return to rationality and reduce the likelihood of trade frictions occurring.

A research report from China International Securities (CITIC Securities) points out that for China’s advantageous industries, lowering export tax rebate rates helps prevent “involution going outward” and improve the profitability of export products.

**　　Entering a new stage of high-quality development**

Under the “dual carbon” strategy, China will achieve its peak carbon emissions target during the “15th Five-Year Plan period followed by the 14th” (i.e., the 15th Five-Year Plan for carbon peak, commonly referred to as “the 15th Five-Year period plus”)—or more specifically, the “15th Five-Year Plan for carbon peak” timeframe. The photovoltaic industry, as a main force for achieving the “dual carbon” goals, is in a critical period of shifting from expansion in quantity to a qualitative leap.

CITIC Securities’ research report believes that in the long run, this export tax rebate adjustment will help accelerate the clearing of domestic photovoltaic and other industry capacity and encourage related domestic enterprises to develop toward exporting higher value-added products.

At the “Photovoltaic Industry 2025 Development Review and 2026 Outlook for Industry Developments” seminar hosted by the China Photovoltaic Industry Association on Feb. 5, Liu Shijin, former vice director of the Development Research Center of the State Council, said that although green industries such as photovoltaics face short-term imbalances between supply and demand, from the perspective of achieving the “dual carbon” goals in the medium to long term and the global energy transition, there is still broad room for development. The industry needs to, while maintaining innovative vitality, promote dynamic balance between supply and demand by establishing a new type of power system, improving carbon market mechanisms, optimizing industrial governance, and other measures.

At the seminar mentioned above, Wang Bohua, an adviser to the China Photovoltaic Industry Association, said that the photovoltaic industry has moved beyond the export tax rebate dividend and has entered a new market-driven stage, with its competition model shifting from “low-price involution” to “high-quality” competition. In the short term, it may lead to industry pains; in the long run, it will force technological innovation and optimize the competitive landscape, enabling China’s photovoltaic industry to build more sustainable competitiveness in global markets. “This should be the necessary path for the photovoltaic industry to move toward maturity.”