China’s Ministry of Finance has announced a significant policy change. The State Taxation Administration has also announced this change. They are reducing the export tax rebate for photovoltaic (PV) products. This measure will take effect on December 1. It will impact the financial strategies of Chinese PV exporters. It will also affect the global solar industry.

Policy Details

Starting December 1, 2024, the export tax rebate rate for solar products will be reduced. This change affects both unassembled solar cells and assembled PV modules.

Product Type	HS Code	Previous Rebate Rate	New Rebate Rate
Unassembled Solar Cells	85414200	13%	9%
Assembled PV Modules	85414300	13%	9%

Impact on the PV Industry

The lowered rebate will reduce refunded taxes for Chinese PV exporters. This change will eat into profit margins. It will compel some companies to adjust export prices. To tackle this, the China Photovoltaic Industry Association (CPIA) took proactive measures in October by organizing a closed-door meeting. The participants, including major PV manufacturers and state-owned energy enterprises, collectively agreed on strategies to stabilize prices.

Agreed Measures to Stabilize Prices

Measure	Details
Floor Price	CNY 0.68/W (agreed upon for large-scale tenders)
Energy Enterprises’ Role	State-owned companies will reject bids below the floor price.
Manufacturers’ Commitment	Avoid underbidding the agreed floor price domestically.

Wang Shujuan is the founder of Zhihui Photovoltaic. She stated that the rebate reduction aligns with the CPIA’s broader goal. This goal is to stabilize prices, particularly in international markets. This adjustment comes in response to a period of declining PV product prices.

Long-Term Strategy and Market Implications

Industry analysts suggest that the tax rebate reduction is part of a longer-term strategy. This strategy aims to keep economic stability in the PV sector. Companies increase export prices to mitigate losses, although actual price shifts will depend on supply-demand dynamics.

“The reduced export rebate rate will have minimal impact on production costs for Chinese PV manufacturers. However, it is likely to provide support for overseas prices. This could aid in a potential recovery,” commented Shanghai Metals Market (SMM).

Market Trends and Future Expectations

• Production Cost vs. Bidding Prices: October 2024 saw domestic bidding prices drop below CNY 0.62 ($0.08)/W, which is below the production cost for many manufacturers.
• Potential for Further Adjustments: Analysts note that the rebate reduction signals the beginning of a broader policy shift. This shift leads to the total removal of export tax rebates in the future.

This evolving landscape in China’s PV sector is poised to have a ripple effect on global markets. It can drive up international PV module prices. This shift safeguards the profitability of Chinese manufacturers.