People in the photovoltaic business often ask: If the tax rebate is suspended, will the orders still be filled despite the tariff?
Foreign trade profits in the past two years have been as thin as paper. Any policy change will turn the ledger over again.
On March 26, the China-US economic and trade meeting in Paris failed to reach an agreement.
The differences on the table are not new and still revolve around new energy products and tariff rules.
It’s not surprising that they can’t agree, but what’s surprising is the rhythm behind it.
There was a six-day window after the meeting, and various speculations were flying in the market. However, companies were calculating one thing: if the export tax policy is changed again, how will the price system go and whether inventory should be moved.
In the early morning of April 1, the official website of the Ministry of Finance of China issued an announcement canceling export tax rebates for 249 products in the entire photovoltaic industry chain.
The list ranges from silicon wafers and cells to modules, inverters, and photovoltaic glass, and the chain covers enough.
The timing is also intriguing.
April 1st corresponds to March 31st US time, which is close to the eve of the launch of the new fiscal year budget for the US photovoltaic industry.
Anyone who has done an annual budget will know that once a node is reached, the plan is dead and the cost of changing it is high.
In the Paris negotiations, the United States proposed to expand imports of new energy products such as photovoltaics from China, emphasized the so-called reciprocal tariff principle, and also released a signal to include photovoltaics in a new round of trade restrictions.
China’s response is also clear: first remove the unreasonably high tariffs.
The tax rates named are not low: the anti-dumping tax on Chinese photovoltaic products is 165.04%, and the countervailing duty is between 29.72% and 41.57%.
With the tariffs there, talking about expanding imports will become empty talk.
Some people interpret the cancellation of tax rebates as an external countermeasure. To be more precise, it is also a tool to “anti-involution and externalization”.
Export tax rebates used to be like a cushion, making it easier to export goods overseas at low prices.
With the cushion removed, prices will be forced back to a rational range.
This is not sudden.
In December 2024, the tax rebate rate was reduced from 13% to 9%, and the industry’s export tax rebate amount was reduced by approximately US$1.054 billion at that time.
In January this year, the Ministry of Finance and the State Administration of Taxation announced in advance that all measures would be cancelled, and companies had a buffer window.
During the window period, leading companies move quickly.
Some companies have raised their module quotations in advance, and overseas distributors have also prepared stocks.
There was a wave of export momentum before the implementation, which is common when trade policies are switched.
The cost conduction after implementation is also calculated.
The caliber given by Shanghai Nonferrous Network is: the export profit of a single 210R module will be reduced by 46 to 51 yuan; canceling the 9% tax rebate will increase the product cost by about 0.06 to 0.07 yuan/watt.
Who does this change hurt more?
Small and medium-sized enterprises are even more affected.
With thin profits, weak bargaining, and narrow financing channels, it is easy to be squeezed out of orders when costs rise.
Leading companies are also under pressure, but their toolboxes are bigger.
Many leading companies are already deploying global production capacity. Factories in Saudi Arabia, Mexico, Chile and other places can cover different markets and can also circumvent friction caused by trade barriers in some links.
Policy changes are never even, and resources will be concentrated on companies that can survive.
Let’s look at the realistic constraints on the US side.
The self-sufficiency rate of photovoltaic modules in the United States is about 18%, and the cost of building a local factory is 2.5 times that of China and three times that of Oman.
The supply gap must be filled by imports. Once the price rises, the project financial model will change.
The American Solar Energy Industry Association has issued a warning, saying that such changes may cause the cost of U.S. photovoltaic projects to increase by 12% to 15%.
It is also predicted that new installed capacity may decrease by 8 to 12GW in 2026, accounting for approximately 15% of the original planned installed capacity.
U.S. companies are also facing another line of pressure: the U.S. court has ruled to impose approximately $54 billion in tariffs on re-exported photovoltaic products from Southeast Asia from 2022 to 2024, affecting more than 230 U.S. photovoltaic installation companies, 47 of which issued early warnings of broken capital chains.
In this context, any increase in component costs will be directly passed on to the terminal.
US developer NextEra Energy announced the suspension of three large-scale photovoltaic projects, citing component costs that exceeded budget.
If the project stops, the supply chain will shrink.
Someone in the industry asked: Can the United States survive with subsidies?
The reality is that companies have indeed written to the Ministry of Commerce, hoping that the government will provide subsidies to offset costs. However, this is in tension with the Trump administration’s policy direction of reducing new energy subsidies, and fiscal space and policy orientation will restrain each other.
At the same time, the attitudes of the allies were not consistent.
The European Union, Japan and others have not fully followed the US de-Sinicization route.
Germany, Spain and other countries have expanded their photovoltaic purchases from China, with purchases increasing by 18% in the first quarter.
They are more concerned about electricity prices, supply stability and delivery times.
Putting the lens back to China, there is another obvious benefit to canceling tax rebates: saving about 15 billion yuan in fiscal funds every year.
The investment direction of the funds is also clear, with priority being used for photovoltaic technology research and development, energy storage supporting equipment and power grid upgrades to serve the carbon peak goal of the “15th Five-Year Plan”.
The signal of this type of arrangement is that the policy shifts from “supplementing exports” to “supplementing capabilities.”
For foreign trade companies, the short term is a change in cost items; for the industrial chain, it is pushing competition from the price side to the technology side, efficiency side, and standard side.
In terms of market share, China still dominates key links: polysilicon production capacity accounts for about 96.0% of the world, silicon wafers 96.2%, cells 91.3%, and modules 80.1%.
The high degree of localization of equipment and materials determines the bargaining power of the supply chain.
But bargaining does not mean risk-free.
Policy withdrawal will also bring pain, especially companies that rely on tax rebates for low-price orders, and will be forced to adjust their strategies.
Some companies will withdraw from the export market, and some will switch to market segments and differentiated products.
You can also read trends by looking at corporate actions.
JinkoSolar invested US$280 million in Saudi Arabia to build 5GW of production capacity; LONGi Green Energy is promoting the expansion of its Mexican factory, aiming to cover 30% of the North American market; Trina Solar is deploying integrated modules and energy storage projects in Chile.
Technical routes are also changing.
Domestic companies have increased investment in high-efficiency battery technologies such as HJT and TOPCon, and it is expected that N-type battery production capacity will account for 70% by 2026.
When product efficiency and reliability become bargaining chips, the space for price wars will be compressed.
There is another line which is the standard.
China is promoting the internationalization of photovoltaic standards. For example, national standards such as module power labeling are striving to become IEC international standards, and it has proposed to lead the formulation of 3 to 5 international standards for key photovoltaic technologies by 2027.
Only when rules are implemented can the right to speak be stable.
The cancellation of export tax rebates this time is not only an external move, but also an internal reckoning: the model of relying on policy space to make profits will become more difficult, while the model of relying on manufacturing capacity, technology iteration, and global layout to make profits will become smoother.
The question left for everyone is also straightforward: when the high tariff wall is erected, the United States hopes that import prices will be low, and the project will not exceed the budget. How can this abacus be based on?
While increasing trade policy and accelerating energy transformation, contradictions will arise on their own.
I will remember a sentence for people in the industry: policies will change, and the accounts will not lie.
Companies that can go through cycles do not rely on luck, but on being able to put costs, production capacity, technology and market into the same table and calculate clearly.
