China's Export Tax Rebate Rate Has Been Lowered, Accelerating The Elimination Of Backward Photovoltaic Production Capacity
China will reduce the export tax rebate rate for some refined oil, photovoltaics, batteries, and some non-metallic mineral products from 13% to 9%, effective December 1, 2024.
On November 20, 2024, the Ministry of Industry and Information Technology revised the 《Standardized Conditions for the Photovoltaic Manufacturing Industry》 and the 《Interim Measures for the Management of Standardized Announcements for the Photovoltaic Manufacturing Industry》 and promulgated the 《Standardized Conditions for the Photovoltaic Manufacturing Industry (2024 Edition)》.
Reviews:
The reduction in the export tax rebate rate will increase corporate costs and accelerate the elimination of obsolete production capacity. Faced with the expectation of tariff increases in developed countries and the uncertainty of responding to external demand, China has guided enterprises to focus on the domestic market and adjust the industrial structure by reducing the export tax rebate rate.
At present, the export of my country's photovoltaic industry accounts for more than 50%. The reduction in the export tax rebate rate has led to an increase in corporate export costs and further compressed profit margins.
In the current context of overcapacity in the photovoltaic industry, low product prices, and difficulty in making profits, the reduction in tax rates has a more obvious impact on obsolete production capacity that relies on export tax rebate subsidies. Therefore, this policy is expected to prompt the photovoltaic industry to eliminate obsolete production capacity, increase technological innovation and industrial upgrading, and promote high-quality development of the industry.
It is worth mentioning that the revised "Standard Conditions" greatly improves the requirements for product performance, power consumption, water consumption and other indicators according to the latest technological development level and industrial development status of the industry.
Among them, the efficiency of newly built N-type batteries and modules shall not be less than 26% and 23.1%;
The reduction power consumption of newly built and expanded polysilicon projects shall be less than 40 kWh/kg, and the comprehensive power consumption shall be less than 53 kWh/kg;
The water consumption of newly built and expanded crystalline silicon battery projects shall be less than 360 tons/MWp and the utilization rate of recycled water shall be higher than 40%;
The minimum capital ratio for newly built and expanded photovoltaic manufacturing projects shall be 30%.
The implementation of the 《Standard Conditions》will greatly increase the entry threshold for new projects, reduce the photovoltaic manufacturing behavior of simply expanding production capacity, and form a clear constraint on the supply side of the industry.
In addition, the conversion efficiency of perovskite modules was also included in the 《Standard Conditions》 for the first time - the existing production capacity is not less than 14%, and the newly built production capacity is not less than 15.5%. This is undoubtedly a great benefit for many companies to establish GW-level production lines and begin commercial exploration of perovskite modules.