With only one day left in the countdown, the photovoltaic industry may be about to undergo its most severe reshuffle.

Starting April 1st, export tax rebates for photovoltaic (PV) products will be officially abolished, marking the end of the long-standing era of PV subsidies.

According to Announcement No. 2 of 2026 issued by the Ministry of Finance and the State Taxation Administration on January 9th, starting April 1st this year, the VAT export tax rebate rate for 249 PV products, including solar cells, modules, and doped silicon wafers, will be reduced from 9% to 0%. The rebate for battery products will be abolished in two phases: first reduced to 6%, and then completely eliminated on January 1st, 2027, allowing companies time to adapt.

Back in 2019, the export tax rebate rate for PV products was reduced from 16% to 13%; in December 2024, it was further reduced to 9%. Just over a year later, the rebate rate has been reduced to zero, a rapid pace that sends a clear policy signal.

As one of my country's "new three pillars" of foreign trade, PV exports have seen considerable growth in recent years. According to InfoLink data, China's solar cell exports reached approximately 116.2 GW in 2025, a year-on-year increase of 97.59%; module exports reached approximately 267.1 GW, a year-on-year increase of 6.4%, with a total export value of approximately US$29.356 billion.

Given such a massive export volume, the far-reaching impact of completely eliminating export tax rebates for photovoltaic products is self-evident.

1. Unexpected Exports: Why Didn't the Rush to Export Exhibit?

Looking back, in the three months following the announcement, the market reaction was much calmer than expected.

Typically, the impending cancellation of a subsidy policy in the manufacturing sector often triggers a rush to increase production capacity and export before the policy takes effect. The reason is easy to understand: the cancellation of tax rebates means increased costs and prices for exported products, and overseas buyers naturally want to complete their purchases at lower prices before the policy takes effect, racing against time. However, this time the situation is different.

Export data shows that photovoltaic exports performed modestly in the first two months of this year, with a slight decline. According to data from Chinese customs, in January and February 2026, the total export value of Photovoltaic Modules in China was 22.48 billion yuan, a year-on-year decrease of 9.26%; the total export volume was 72.0777 million units, a year-on-year decrease of 3.42%. The expected rush to export did not materialize.

Pricing also lacks persuasiveness. According to data from the China Silicon Industry Association, as of March 26, prices for n-type remelted and dense photovoltaic modules continued to decline, with week-on-week drops of 6.25% and 4.26%, respectively. The lowest transaction price for n-type dense photovoltaic modules fell to 39,000 yuan/ton, continuing to fall below the 40,000 yuan/ton mark.

Module prices also showed a gradual downward trend. Data from Shanghai Metals Market (SMM) on March 30th showed that distributed Topcon183, 210R, and 210N high-efficiency modules were priced at RMB 0.752/W, RMB 0.764/W, and RMB 0.765/W respectively, while centralized Topcon182/183 and 210N high-efficiency modules were priced at RMB 0.727/W and RMB 0.747/W respectively, with multiple specifications experiencing varying degrees of price declines.

At this delicate juncture, why are photovoltaic exports sluggish? The reasons can be examined from both the supply and demand sides.

On the one hand, the supply side is burdened by excessive inventory, leaving them unable to meet demand. Taking polysilicon as an example, currently only 10 domestic companies are in operation, with an average industry operating rate as low as 35.5%. Even so, the supply contraction has not fundamentally reversed the supply-demand imbalance.

The silicon wafer and solar cell segments are also under pressure. Simply put, it's not that they don't want to buy, but rather that warehouses are overflowing with inventory, leading to overcapacity and very limited room for negotiation. Even with overseas orders arriving, companies are more inclined to digest existing inventory rather than risk increasing production.

On the other hand, demand is weak, with a strong wait-and-see attitude. Downstream buyers generally exhibit a "buy high, sell low" mentality; when prices across the industry chain continue to decline, overseas customers are even less willing to purchase and exert greater pressure to lower prices.

Meanwhile, global photovoltaic end-user demand is generally weak, with new installations expected to decline for the first time in many years in January-February 2026. These multiple factors combined have further suppressed downstream purchasing intentions.

With both supply and demand constrained, a rush to export is unlikely, and the market downturn is not surprising.

2. Beyond Costs, Where Lies the Bigger Impact?

The cancellation of export tax rebates will first and foremost impact costs. Industry estimates suggest that the cost of photovoltaic modules is expected to increase by 0.06 to 0.07 yuan per watt.

Module manufacturers then face two choices: either absorb the increased costs themselves, compressing profit margins, or pass the increased costs on to downstream customers. However, the global module market remains buyer's market, and forcibly raising prices could lead to order losses, especially in price-sensitive third-world markets.

Meanwhile, in 2025, the gross profit margin of my country's entire photovoltaic industry was already at a historical low, with most segments of the main industrial chain experiencing losses. The industry's average gross profit margin was only about 3%-5%, and the seven leading companies suffered a combined loss of 28.9-32.8 billion yuan. Many companies in the industry had single-digit gross profit margins; for them, the cancellation of tax rebates would only exacerbate their difficulties.

Faced with cost pressures, major module manufacturers such as Trina Solar, Jinko Solar, and LONGi Green Energy have raised their export prices, attempting to pass on the cost pressures brought about by the cancellation of export tax rebates to downstream industries. However, judging from actual market transaction prices, these price increases have not been effective.

It is foreseeable that the situation of leading enterprises and SMEs will diverge rapidly. Leading enterprises, with their integrated production capacity and economies of scale, can, to some extent, share cost pressures and have a relatively strong ability to withstand risks. SMEs, on the other hand, already lack cost advantages and bargaining power; the increased costs brought about by the cancellation of export tax rebates are enough to push them to the brink of losses.

In the short term, accelerated industry consolidation is inevitable. As profit margins are further compressed, competition for market share will become increasingly fierce. SMEs with outdated technology, weak capital, and a single customer structure will find it difficult to survive the dual pressures of price wars and rising costs.

3. No pain, no gain: How can the cancellation of export tax rebates cool down the involution of competition?

The cancellation of export tax rebates is essentially forcing the photovoltaic industry to move away from involution. In the past decade or so, some low-quality and inefficient production capacity has survived by relying on government subsidies for exports. Therefore, the industry is rife with both good and bad companies, and price wars are rampant, making it difficult for truly technologically advanced and capable enterprises to stand out.

Now, the government is proactively cutting off subsidies through policy, accelerating industry consolidation, and forcing companies to compete through technological innovation, expanding channels, and improving service levels. The sudden elimination of tax rebates has instantly exposed the industry to real market competition. Even if short-term pain is inevitable, this step is imperative.

Wang Bohua, a consultant at the China Photovoltaic Industry Association, previously predicted that China's new photovoltaic installations would reach 180GW in 2026, with an optimistic estimate of 240GW. Both of these forecasts represent a significant drop from the 315.07GW of new photovoltaic installations projected for 2025. Although the industry will inevitably experience short-term pain, this adjustment is inevitable, demonstrating the government's firm determination to promote industry transformation.

The policy level has also released clear guidance. On March 30, the State Administration for Market Regulation issued a notice requiring further implementation of the "Anti-Unfair Competition Law of the People's Republic of China," explicitly proposing a comprehensive crackdown on "involutionary" competition, with a focus on preventing vicious competition in fields such as photovoltaics. This also demonstrates that the cancellation of export tax rebates for photovoltaics is a crucial part of the national strategy to rectify irregularities and promote high-quality development in the industry.

With the formal cancellation of domestic photovoltaic export tax rebates and increasingly stringent international tariff barriers, coupled with intensified involution within the domestic industry, expanding production capacity overseas has become a key way for many photovoltaic companies to overcome development bottlenecks and avoid dual pressures.

By establishing localized production capacity in key markets such as the Middle East and the United States, companies can not only effectively offset the cost increases brought about by the cancellation of tax rebates but also circumvent increasingly high trade tariffs. Simultaneously, they can leverage local preferential policies to reduce operating costs and better meet end-user demand. Currently, leading companies such as Jinko Solar, Trina Solar, Canadian Solar, and TCL Zhonghuan have taken the lead, deeply integrating Chinese photovoltaic technology and management experience with overseas manufacturing to seize the initiative in global expansion.

However, expanding production capacity overseas is not a smooth road. The huge upfront investment, long return cycle, and real challenges such as cultural differences, talent management, and incomplete supply chain support still test a company's overall strength. But for leading companies with advantages in technology, capital, and channels, establishing overseas production capacity is an inevitable choice to cope with industry changes.

The tide of time will not stop for anyone. The cancellation of tax rebates is not the end, but the starting line for industry transformation and upgrading, and the beginning of a new cycle of global competition. Only by completing the strategic layout of overseas production capacity first and consolidating core competitiveness can companies take the initiative and maintain their leading position in the next round of industry competition.