China has reduced the export tax rebate for solar products, lowering refunded taxes for Chinese PV exporters and eating into their profit margins. The move might force some companies to increase export prices to mitigate potential financial losses.

China’s Ministry of Finance and State Taxation Administration have announced a reduction in the export tax rebate for photovoltaic products. Starting Dec. 1, the rebate for unassembled solar cells (HS Code 85414200) and assembled PV modules (HS Code 85414300) will drop from 13% to 9%.

The lowered rebate will reduce refunded taxes for Chinese PV exporters, squeezing profit margins. Companies may respond by increasing export prices to offset potential losses.

“While the reduced export rebate rate will have minimal impact on production costs for Chinese PV manufacturers, it is likely to provide support for overseas prices, aiding in a potential recovery,” said research firm Shanghai Metals Market (SMM). “However, whether prices will actually rise depends heavily on supply-demand dynamics in the respective regions.”

The adjustment follows a year of declining PV product prices, driven by increased production capacity across the industry’s value chain. In October, domestic bidding prices in China fell below CNY 0.62 ($0.08)/W, which is widely considered below production cost.

They agreed on a “floor price” of CNY 0.68/W, with state-owned energy companies pledging to reject bids below this price in large-scale tenders, while manufacturers committed to not underbidding it in domestic competitions.

Some industry analysts, who said the tax rebate reduction is part of a longer-term strategy.

1.https://youtu.be/tW4Nb8LqQUk