Key Points
- China is canceling VAT export rebates for solar panel products starting April 1.
- The move is designed to curb overcapacity and stop deflationary price wars.
- The industry association said the change will help prices return to a “rational” level.
- The rebate for battery products will also be cut and then eliminated by 2027.
China is ending a key tax break for its solar panel exporters. Starting April 1, the government will cancel the value-added tax (VAT) rebates that have helped Chinese companies dominate the global solar market. The move is a major step in Beijing’s effort to control overcapacity and stop the brutal price wars that have been hurting the industry.
For years, these tax rebates have enabled Chinese exporters to offer their products at extremely low prices, often using the rebates as a direct discount for foreign buyers. This has led to accusations of unfair competition and has sparked trade tensions with other countries.
The China Photovoltaic Industry Association said the change will help “promote a rational return of foreign market prices and reduce the risk of trade frictions.”
In other words, they hope that by making it slightly more expensive for Chinese companies to export, prices will stabilize and the industry will become healthier in the long run.
This isn’t the first time China has made a move like this. Back in December 2024, the government had already reduced the rebate from 13% to 9%. This new decision to scrap it entirely shows that Beijing is getting more serious about reining in its sprawling solar industry.
The new rules will also affect battery products. The VAT export rebate for batteries will be reduced from 9% to 6% starting in April, then fully eliminated on January 1, 2027.
