China to Phase Out Export Tax Rebates on Solar and Battery Products

China has announced that it will begin eliminating value-added tax export rebates for photovoltaic (solar energy) products starting April 1 this year, according to a joint statement by the Ministry of Finance and the State Taxation Administration.

Export tax rebates on battery products will be reduced from 9% to 6% between April and December 2026, and will be completely removed starting January 1, 2027. This follows an earlier adjustment in November 2024, when rebate rates on solar wafers, cells and modules were lowered from 13% to 9%. This marks the second major adjustment to China’s export rebate regime for solar and battery products in just over a year.

In the previous round, announced on Nov. 15, 2024, and implemented from Dec. 1, 2024, export rebate rates for selected refined oil products, solar equipment, batteries, and certain non-metallic mineral products were reduced from 13% to 9%.

The removal of such rebates for solar products has long been under consideration by authorities and was expected by the industry, according to a Citi Research. The China Photovoltaic Industry Association (CPIA) explained that the change is aimed at addressing market distortions overseas, where fierce competition and falling prices have squeezed profit margins and heightened trade tensions for Chinese solar firms.

According to the CPIA, export rebates have sometimes been used by foreign buyers in price negotiations, effectively shifting fiscal burden abroad and diminishing their original purpose of offsetting domestic VAT costs. This has also raised the risk of anti-dumping and countervailing investigations against Chinese products.

The association believes that gradually lowering and ultimately eliminating rebates will help overseas prices better reflect actual production costs and technological value, reduce trade frictions, and encourage healthier competition.

The published product lists indicate that the solar category covers monocrystalline silicon wafers with diameters above 15.24 cm, both above and below 220 micrometers in thickness, which are doped for electronic industry use. Industry sources note that most mainstream PV wafers currently produced fall within this definition. The list also includes unassembled solar cells and finished photovoltaic modules.

The battery category extends beyond lithium-ion batteries and battery packs to include other energy storage technologies, such as all-vanadium redox flow batteries. It also encompasses key upstream materials used in lithium-based batteries, including lithium hexafluorophosphate, lithium manganate, lithium cobalt oxide, and lithium nickel cobalt manganese oxides.

Market analysts say the latest move will materially increase export costs for Chinese PV and battery manufacturers. However, with a roughly three-month transition period before the new policy takes effect, some expect a surge in outbound shipments in the first quarter of 2026 as companies accelerate exports ahead of the deadline.

Over the longer term, analysts argue that the rollback of export tax incentives is likely to reinforce China’s broader industrial policy objectives, encouraging consolidation, technological upgrading, and a shift toward higher-value, more sustainable manufacturing rather than volume-driven export growth.