The Export Tax Rebate Rate For Photovoltaic Modules Has Been Reduced To 9%!

China’s Ministry of Finance and State Taxation Administration announced that from December 1st, the tax rebate rate for unassembled solar cells (HS Code 85414200) and assembled photovoltaic modules (HS Code 85614300) will be reduced from 13% to 9%. This move has damaged the profit margins of Chinese photovoltaic exporters and may force some companies to increase export prices to mitigate potential financial risks.

Announcement from the Chinese Ministry of Finance

The reduction of export tax rebate rate for solar products in China was carried out one year after the price of photovoltaic products decreased. Due to the increase in production capacity across the industry’s value chain, the domestic bidding prices in China fell below CNY 0.62 ($0.08)/W in October this year, which is widely considered below production cost. To prevent further price drops and significant financial losses, the China Photovoltaic Industry Association (CPIA) organized a closed-door meeting with major photovoltaic manufacturers and state-owned energy enterprises to agree on a “floor price” of CNY 0.68/W. State-owned energy companies promise to reject bids below this price in large-scale tenders, while manufacturers commit to not underbidding it in domestic competitions.

Source: News media

Industry analysts stated in an interview with Photovoltaic magazine that the tax rebate reduction is part of a longer-term strategy. Especially in the international market, tax reduction policies further support CPIA's efforts to stabilize prices. As Chinese photovoltaic products dominate the global market, the government may eventually completely cancel export tax rebates, which could push up international photovoltaic module prices while maintaining the profitability of major Chinese solar manufacturers.

The above article is excerpted from "pv magazine"

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