In-depth Analysis Of China's PV & Battery Export Tax Rebate Policy

The core of the new policy is that PV products will have their 9% VAT export tax rebate fully canceled starting April 1, 2026, while energy storage-related batteries will see a two-step reduction (9%→6% from April-December 2026, and full cancellation from January 2027). The policy applies to exports based on customs declaration dates, with consumption tax rebate policies remaining unchanged.

This is a crucial measure to precisely address the industry's price undercutting, promote subsidy independence in the solar+storage sector, and drive technological upgrading. Short-term impacts include pressure on export profits and shipment rhythms, while long-term benefits include accelerating the exit of inefficient capacity, favoring leading enterprises, and boosting high-value-added integrated solar+storage businesses.

Core Policy & Industry Context

1. Targeted Tiered Adjustments

2. Industry Reality: Price Under-cutting & Rebate Dependence

PV Sector: Jan-July 2025 PV module exports reached 158.6 billion USD (111.207 billion RMB), down 22.64% YoY; Aug-Nov exports surged to 105.8 billion USD (74.155 billion RMB), up 23.81% YoY. Companies have proactively accelerated exports and built overseas inventory to buffer against the policy adjustment, reducing short-term impacts.

Jan-Nov 2025 cumulative PV module exports totaled 264.5 billion USD (185.40 billion RMB), down 9.0% YoY, while export volume reached 243.8GW, up 5.8% YoY. This "volume up, price down" trend reflects profit erosion from price competition, with some enterprises relying on tax rebates to offset losses from overseas price cuts, effectively transferring fiscal benefits to foreign buyers.

Energy Storage Battery Sector: In November 2025, domestic ESS cell production accounted for approximately 33.6% of total output, with leading enterprises facing tight capacity. However, intensified homogeneous competition and frequent low-price bidding have made tax rebates a "profit regulator" for some companies.

Short-term Impacts & Response Window for Solar+Storage

1. Direct Profit & Cost Effects

PV Modules: After canceling the 9% tax rebate, with an average price of 0.106 USD/W (0.75 RMB/W), the unit cost increases by approximately 0.0095 USD/W (0.0675 RMB/W). Profit per 550W module decreases by about 5.3-5.7 USD (37-40 RMB), potentially reducing annual profits of leading enterprises by 1.4-2.9 billion USD (10-20 billion RMB). SMM predicts a short-term 5%-10% decline in export volume after policy implementation.

Energy Storage Batteries: The 3-percentage-point reduction from April-December 2026 will reduce profit by approximately 0.0011 USD/Wh (0.008 RMB/Wh) based on a cost of 0.0499 USD/Wh (0.35 RMB/Wh); full cancellation in 2027 will cut profit by another 0.0043 USD/Wh (0.03 RMB/Wh). Leading enterprises, with stronger overseas pricing power, face lower difficulty in passing on price increases compared to module manufacturers, making the impact manageable.

2. Market Response to the 3-Month Export Rush Window

The export surge has already started: Aug-Nov 2025 PV module exports rose 23.81% YoY; November exports reached 24.4 billion USD (17.14 billion RMB), up 33.9% YoY and 6.6% MoM.

During this window, solar+storage enterprises will accelerate production scheduling and secure orders, with the most intense order grabbing expected in price-sensitive emerging markets such as Southeast Asia, the Middle East, and Africa. Enterprises should remain vigilant against risks of overseas customers pushing for price reductions and extending payment terms, and are advised to include clear price-sharing clauses for tax rebate adjustments in contracts.

Long-term Value Reconstruction in Solar+Storage

1. Subsidy Independence Drives Industry Back to Technology & Value Fundamentals

PV Sector: Inefficient capacity (such as low-efficiency P-type modules and high-cost wafers) will accelerate phase-out without tax rebate support; high-efficiency N-type (TOPCon/BC/HJT) modules and integrated solar+storage systems will more easily absorb cost increases through price adjustments due to higher power generation efficiency and added value, increasing market share for leading enterprises.

Energy Storage Sector: The policy will shift competition from "price wars" to "technology/reliability/service battles," such as long-cycle-life cells, intelligent BMS, and integrated ESS solutions. High-margin commercial & industrial (C&I) and residential energy storage will become key transformation focuses for enterprises, with sustained strong demand in overseas markets (e.g., European C&I storage, Australian residential storage).

2. Easing Trade Frictions & Optimizing Fiscal Resource Allocation

Canceling tax rebates will reduce anti-dumping/anti-subsidy investigations triggered by low-price exports (such as the US and EU's "double anti-dumping" measures against Chinese PV products), lowering international trade risks and creating a more stable environment for solar+storage enterprises' global expansion.

Fiscal funds will shift from export subsidies to technological R&D and industrial chain capacity building (e.g., critical upstream materials, energy storage safety technologies), supporting the high-quality development of the solar+storage industry.

3. Synergistic Advantages of Integrated Solar+Storage Highlighted

Integrated solar+storage projects (e.g., PV+ESS power plants, residential solar+storage systems) have lower reliance on tax rebates due to higher comprehensive returns. After the policy adjustment, overseas customers will prefer integrated solutions, giving competitive advantages to solar+storage enterprises with system integration capabilities.

For example, leading solar+storage companies like Sungrow and Trina Solar have over 80% of their energy storage shipments to overseas markets. With technological and brand advantages, they can offset the impact of tax rebate cancellation by adjusting product mix and increasing service premiums.

Strategic Responses for Solar+Storage Enterprises

Short-term (1-3 months): Seize the export window to lock in high-value orders, negotiate price adjustment mechanisms with customers, and advance customs declarations; optimize inventory management to reduce raw material and finished product backlogs and lower cash flow pressure.

Mid-term (6-12 months): Deploy localized overseas production (e.g., Southeast Asian factories) to avoid trade and tax risks; increase R&D investment in N-type modules and long-life energy storage cells to enhance product added value and pricing power.

Long-term (1-3 years): Focus on high-margin businesses such as integrated solar+storage, virtual power plants, and energy storage operation & maintenance; expand into price-insensitive, quality-focused markets in Europe and Australia to reduce dependence on a single market.

Quick Win Strategies for Small & Medium-Sized Businesses

Rush to place orders for delivery before April 1. Sign simple price contracts to avoid post-policy hikes. Stock up 3–6 months of core goods (standard PV modules, small ESS packs) to buffer cost shocks.

Final Tip: This policy weeds out cheap, low-quality suppliers. For small businesses, it's a chance to upgrade your product mix without big risks – stay flexible and you'll thrive.