China will cancel VAT export rebates for solar PV cells and modules from April 1, 2026
Battery export rebates will fall from 9% to 6% and be fully removed from January 1, 2027
This is likely to have repercussions across the global markets as Chinese manufacturers may raise prices by around 9% to protect margins
China will cancel value-added tax (VAT) export rebates for solar PV products from April 1, 2026, according to an announcement from the Ministry of Finance and the State Taxation Administration of China.
Additionally, the export tax rebate for batteries will be lowered from 9% to 6% from April 1, 2026, before being completely phased out from January 1, 2027.
The list includes solar PV cells that are not installed in modules or assembled into blocks, as well as cells already installed in modules or assembled into blocks.
With export tax rebates, Chinese manufacturers receive a 9% refund on the VAT paid on exported solar PV products from the government. It was lowered from 13% to 9% on December 1, 2024, including for cells and modules, with the intent to slow production expansion during periods of overcapacity and intense price competition (see China To Lower Solar Export Tax Rebates From 13% To 9%).
Lower export rebates for solar and storage mean higher costs for Chinese manufacturers, which they will then pass on to their international buyers. The industry may then expect prices to increase by 9% for manufacturers to continue to meet their business targets.
Chinese market research firm Gessey PV Consulting makes some calculations to assess how it might impact manufacturers. For instance, if a factory sells its modules for RMB 0.70/W (including tax), with no export tax rebate and a 9% price increase, the module will cost RMB 0.763/W.
In USD terms, assuming an exchange rate of RMB 7.0128, with a 9% rebate, the module will be priced at $0.0998/W. With zero rebate, the price will increase to $0.1088/W.
While this may bring in some stability to PV prices that have been compressing companies’ profit margins, it will increase project costs for buyers elsewhere in the world and affect power purchase agreement (PPA) price negotiations going forward.
Another result of this policy certainty could be stockpiling of inventories before the April deadline, as InfoLink Consulting says a 9% export tax rebate has become a mandatory clause in contracts in Europe. Currently, Chinese exports to Europe cost $0.084/W to $0.088/W.
