On January 9, 2026, China’s Ministry of Finance announced a major change to the country’s trade policy. Effective April 1, 2026, VAT export refunds will no longer be available for PV products, marking a significant shift in support for the world’s largest solar exporter. The policy also affects battery products; beginning in April 2026, export refunds will be reduced from the current 9% to 6% for the remainder of the year and eliminated on January 1, 2027.
The affected products are mostly PV products currently exported from China. So, with increased export costs, it will be difficult for most firms to absorb. This action was taken at the request of industry groups within China, including the China Photovoltaic Industry Association (CPIA), which stated that eliminating the export refund would create more stable pricing in foreign markets, thereby reducing the potential for trade disputes with foreign manufacturers.
One of the most important reasons is that the original VAT export rebate policy, which was created to support the development of a new industry, is no longer necessary as Chinese photovoltaic (PV) manufacturers now account for nearly half of the total global manufacturing capacity; therefore, by eliminating VAT export rebates, the prices at which Chinese PV manufacturers sell their products overseas should reflect the actual cost of production plus the market value of their technology.
Moreover, removing rebates will help eliminate price distortions that create the potential for anti-dumping and countervailing duty investigations. Furthermore, industry experts believe that the elimination of rebates will promote consolidation and technological upgrading and will refocus competition from a volume-driven strategy to a premium-value strategy in the PV market.
In the short-term, it is anticipated that there will be a significant increase in the number of shipments before the April deadline because companies will attempt to maximize the benefits from the existing VAT export rebate policy and to minimize the impact of higher export prices. In addition to shipping more products in advance of the deadline, many PV manufacturers may choose to push up the shipping of their products and the placing of new orders to the first quarter of 2026 to be able to retain their market share in the foreign marketplace before the deadline.
A broader global context influencing the PV supply chain includes the ethylene vinyl acetate (EVA) market. Elimination of export rebates may adversely affect downstream procurement and, therefore, introduce an additional layer of complexity to the EVA pricing outlook for late 2026. According to the latest assessment done by the ChemAnalyst database, the prices of Ethylene Vinyl Acetate 28%VA Ex Works Nanjing stood at USD 1,215/MT in early January 2026.
Long-term, analysts are predicting that the removal of VAT export rebates will cause a decline in demand for Chinese-manufactured PV products in markets where pricing is sensitive, particularly in markets that have both local content and/or tariff restrictions. Consequently, this might lead foreign buyers to diversify the source markets from which they buy and/or to invest in the development of PV manufacturing facilities near their own locations to mitigate their cost increases related to the removal of VAT export rebates.
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