China to End Solar and Battery Export Rebates, Squeezing Manufacturer Margins

Edgen Stock

·Jan 09 2026, 12:52

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Key Takeaways

China's Ministry of Finance is removing a key financial incentive for its renewable energy exporters. The government will cancel value-added tax (VAT) export rebates for photovoltaic products and phase them out for batteries, a move set to increase costs and pressure the profitability of major manufacturers.

Photovoltaic Rebates Canceled: Effective April 1, 2026, all VAT export rebates for solar products will be eliminated.
Battery Rebates Phased Out: Battery export rebates will be cut from 9% to 6% on April 1, 2026, before being fully removed on January 1, 2027.
Increased Export Costs: The policy change directly raises the cost of exporting for affected companies, likely eroding their international price advantage and squeezing profit margins.

Solar Rebates Eliminated Effective April 1, 2026

China's government is set to withdraw a crucial financial support for its world-leading solar industry. In an official notice on January 8, 2026, the Ministry of Finance and the State Taxation Administration announced the complete cancellation of value-added tax (VAT) export rebates for photovoltaic products, effective April 1, 2026. This policy shift, detailed in Announcement No. 2 of 2026, directly increases the cost of goods sold for Chinese solar exporters. The removal of the rebate will pressure manufacturer profit margins and could diminish the aggressive pricing advantage that has allowed Chinese firms to dominate the global solar supply chain.

Battery Rebates Cut to 6% in Phased Removal

The same announcement outlines a two-stage removal of export incentives for the battery sector. Starting April 1, 2026, the VAT export rebate for battery products will be reduced from its current 9% rate to 6%. This reduced rate will remain in effect until December 31, 2026. The second stage will see the rebate fully eliminated starting January 1, 2027. This gradual phase-out gives battery manufacturers a brief period to adapt to the new cost structure. However, the move signals a clear policy direction away from subsidizing exports, forcing companies to absorb the added costs or attempt to pass them on to international customers. The announcement clarified that existing export policies for consumption taxes on these products remain unchanged.