China’s Solar Exports Surge 267% Despite Tax Rebate Cancellation
China’s solar photovoltaic (PV) exports to Southeast Asia surged 267% year-on-year in April 2026, according to customs data reported by People’s Daily, defying the government’s decision to cancel export tax rebates on PV products just one day prior. The dramatic increase underscores both the resilience of China’s solar industry and the world’s insatiable demand for its products amid the accelerating global energy transition.
Context: A Policy Shift After 13 Years
For over a decade, China’s PV industry benefited from a generous export tax rebate system first introduced in 2013 to shield manufacturers from EU and US anti-dumping investigations. The policy allowed exporters to reclaim 13% VAT on overseas sales, effectively subsidizing Chinese solar products in global markets.
On January 8, 2026, the Ministry of Finance and the State Taxation Administration issued Announcement 2026 No. 2, cancelling VAT export rebates for 249 PV products across the entire supply chain — from polysilicon and wafers to cells, modules, and inverters — effective April 1, 2026. Battery products received a nine-month transition period, with rates reduced to 6% through December 2026 before dropping to zero in January 2027.
The Surge: Exports Defy Expectations
Despite the policy headwind, China’s cumulative PV product exports from January to April 2026 rose approximately 43% year-on-year. The standout performer was Southeast Asia, where single-month module exports in April skyrocketed 267% compared to the same period last year, as reported by China News Network.
Factories in Yiwu, Zhejiang Province — a major PV manufacturing hub — are operating at full capacity, with overseas orders booked solid across multiple production bases. One facility was observed preparing a shipment bound for Europe, illustrating the breadth of global demand.
Industry Voices: Resilience and Adaptation
Chen Gang, Chairman of Aixu Co., Ltd., a leading Chinese solar cell manufacturer, described the demand environment in stark terms. “Orders last year grew 130% compared to the year before,” Chen told reporters. “Due to limited production capacity, we’ve had to shift domestic capacity to overseas markets, so this year is about 50% growth over last year.”
On the tax rebate cancellation, Chen noted that customers had been remarkably accommodating. “Despite the export tax rebate cancellation, customers have been very understanding, and the vast majority have adjusted sales prices accordingly.”
Industry analysts suggest that module prices have already risen 15-20% from early 2026 lows, with N-type high-efficiency module export prices up 7.2% year-on-year — a reversal of the brutal price war that characterized 2025.
Analysis: Why China Cancelled the Rebates
The decision to end PV export rebates was not arbitrary. According to expert analysis, several strategic considerations drove the policy shift:
Industry Maturity: China’s PV industry has achieved global dominance — controlling 96% of polysilicon capacity, 96.2% of wafer capacity, 91.3% of cell capacity, and 80.1% of module capacity globally, according to CPIA 2025 data. Policymakers concluded the sector no longer needs export subsidies.
Anti-”Involution”: Companies had been using rebates as bargaining chips in overseas price wars, leading to a situation of “volume up, price down, profits out.” In 2025, 55 of 118 listed PV companies reported net losses totaling 28.457 billion yuan, with average gross margins of just 3.64%.
Trade Protection Buffer: Export rebates were frequently cited in EU and US anti-subsidy investigations. Removing them reduces litigation risk and strengthens China’s position in trade disputes.
Fiscal Efficiency: In 2025, PV export rebates totaled approximately 15.3 billion yuan, much of which effectively subsidized overseas buyers rather than supporting domestic innovation.
The Global Market Outlook
Industry insiders estimate that 2026 global PV new installations will remain above 500 GW, according to the China Photovoltaic Industry Association’s “15th Five-Year Plan” roadmap released in February 2026. The CPIA projects 2026 global installations at 500 GW (baseline) to 667 GW (optimistic), with China accounting for 180-240 GW.
While 2026 is expected to see a temporary decline from 2025’s record 580 GW, the long-term trajectory remains firmly upward. The CPIA forecasts global annual PV installations reaching 725-870 GW by 2030.
Implications: Industry Consolidation and Technology Shift
The rebate cancellation is expected to accelerate the exit of inefficient small and medium enterprises. Over 60% of small module producers — those with annual capacity below 1 GW and outdated technology — are projected to exit the market in 2026-2027. The CR5 concentration ratio in modules is expected to rise from 65% in 2025 to 75% by 2027.
At the same time, the industry is shifting from price-based to technology-based competition. N-type TOPCon and HJT high-efficiency cells already account for 97% of global market share, and perovskite tandem cells are expected to reach GW-scale production by 2030 with conversion efficiency exceeding 33%.
Leading Chinese companies are also accelerating overseas capacity deployment — Jinko in Saudi Arabia, Longi in Vietnam and India, Sungrow in Poland — with overseas capacity expected to exceed 30% of total by 2030.
What’s Next
The 267% surge in Southeast Asian exports signals that the region is becoming a critical growth driver for Chinese PV exports, potentially offsetting slowdowns in other markets. However, several questions remain: Will module price increases of 15-20% slow domestic installation growth? Can Southeast Asian countries ramp up their own production capacity? And will the removal of export rebates actually reduce trade friction with the EU and US, or will new barriers emerge?
What is clear is that China’s solar industry — despite policy headwinds, trade tensions, and a painful period of overcapacity — remains the undisputed global powerhouse, and the world’s appetite for its products shows no sign of waning.