There are only two days left until the cancellation of photovoltaic export tax rebates! Which companies can seize the opportunity in industry reshuffling?

Starting from April 1, the 9% VAT export tax rebate for photovoltaic products will be officially canceled, bringing an end to the subsidy era that has lasted for years.

On the eve of the policy taking effect, the industry did not see the expected rush to “export at any cost.” Export data across the entire industrial chain for January and February remained steady. Meanwhile, polysilicon prices fell to a new low of 40,000 yuan per ton. Prices for wafers and cells continued to decline as well, reflecting persistent weak market sentiment and the fact that end-demand has yet to rebound.

Once the policy takes effect, the photovoltaic industry will also shift from “subsidy-driven” to competing based on genuine market competitiveness. Industry insiders interviewed by First Financial Daily believe that in the short term, multiple factors such as the cancellation of the policy, falling prices across the industrial chain, and weak demand may put pressure on photovoltaic companies’ performance in the second quarter. In the medium term, however, the acceleration of capacity clearing is expected to improve the supply-demand landscape. At the historical turning point where the industry’s structure is being reshaped, technological, cost, and channel advantages will determine which companies can get through the cycle, and the market’s focus is on the prospects for profit recovery among leading companies.

Cancelling the tax rebate accelerates capacity clearing and reshapes the industry

The cancellation of the VAT export tax rebate, in essence, is a policy move to cut off the “subsidy-based low-price competition” channel and is intended to speed up industry capacity clearing. In the past, government subsidies for exports allowed some low-quality and inefficient capacity to survive. After the policy is canceled, companies must compete based on real costs, technology, and channels—not rely on policy dividends.

After the policy takes effect, the “subsidy-based” survival space for photovoltaic manufacturers will be completely drained. For small and midsize enterprises whose gross margins have long hovered around the edge of 3% to 5%, the cancellation of the tax rebate means that costs will increase by several percentage points on the cost side. How to adapt to full-scale market-oriented competition is the main challenge these companies face. For leading companies that have fully integrated capacity for polysilicon, wafers, cells, and modules, the additional costs can still be absorbed internally through the supply chain or passed downstream, thanks to manufacturing cost advantages, brand reputation, and capital advantages.

Photovoltaic manufacturers have already responded in advance. According to publicly available data, as of March 26, mainstream module companies including Trina Solar (688599.SH), JinkoSolar (688223.SH), and LONGi Green Energy (601012.SH) have all raised their export quotes, attempting to pass on the cost pressure caused by the tax rebate cancellation to end markets.

After the subsidy cancellation policy officially takes effect, how will the scale of photovoltaic product exports change? This is still unknown. But from the domestic demand side, in recent times, industrial-chain prices have continued to fall, indicating a situation of weak demand.

The Silicon Industry Branch of the China Nonferrous Metals Industry Association (hereinafter “the Silicon Industry Branch”) disclosed this week that, during the week, polysilicon prices fell to around 40,000 yuan per ton. Wafer and cell prices also declined in tandem. Among them, the mainstream price of cell wafers fell 2.44% month-over-month compared with the previous week, while module prices were flat month-over-month compared with the previous week.

The Silicon Industry Branch pointed out that the main reason the industrial-chain price downtrend continued was that upstream and downstream companies were relatively pessimistic about prospects. Downstream companies’ willingness to purchase was extremely low, and their pressure to cut prices was substantial. The “buy on rising, not on falling” mindset among downstream buyers has become increasingly obvious, further suppressing purchase intentions beyond just rigid demand, leading to even weaker market demand.

Price declines create a double squeeze on the industry. On the one hand, the survival space for marginal companies is being compressed. After the tax rebate subsidy is canceled, they can no longer digest cost increases through price hikes, and business resilience faces challenges. On the other hand, weak demand also forces the pace of supply-side clearing to slow down. According to industry research, this week wafer companies’ operating rates generally fell. Some companies plan to reduce output and lower load. Operating rates have dropped from 50% to 70% to lower levels. With inventories high and raw material prices also falling, the pressure for supply-side contraction is increasingly evident.

Short-term impact hits Q2 performance; medium-term outlook may reshape the industry landscape

The end of the subsidy era is not the end point of photovoltaic industry development, but a turning point from policy-driven policy to market competition. The role of full market-oriented competition in pushing supply-side clearing has drawn widespread attention from the market.

Since this photovoltaic cycle bottomed out, the capacity-clearing process has been more complicated than expected. In 2025, leading companies explored, through signing self-discipline agreements and jointly establishing capacity integration platforms, pathways to regulate supply using market-oriented methods. While they achieved a certain degree of capacity clearing, it has not been enough to completely reverse the supply-demand landscape.

A新能源 industry analyst told a reporter from First Financial Daily: “The implementation of the policy to cancel export tax rebates marks the formal end of the model that relies on fiscal subsidies to participate in international competition. Faced with an increasingly complex international trading environment, leading companies are accelerating the ‘global localization’ strategy, building overseas production bases in key markets such as Southeast Asia and the Middle East, so that production, operations, branding, and services go overseas ‘as one.’ Therefore, the impact of the subsidy cancellation is only phased.”

Meanwhile, in the short term, with multiple factors stacking up—such as the immediate shock from the tax rebate cancellation, weak product prices, and strong end-market wait-and-see sentiment—photovoltaic companies’ Q2 financial reports may be hard to describe as optimistic. In recent times, prices across the photovoltaic industrial chain have fallen rapidly. Not only has this not stimulated demand, it has instead intensified wait-and-see sentiment, indicating that market clearing needs to satisfy two key conditions: a decline in the uncertainty of inventories and a substantive recovery of end demand. But so far, there has been no clear signal.

The analyst said that as polysilicon prices rebound in the second half of 2025, it has already helped some companies return to profitability. In 2026, the industry will enter the key phase of capacity clearing. The “pain period” after the subsidy cancellation will accelerate the elimination of backward capacity, and its role in driving supply-side clearing should be closely monitored.

“Short-term impacts will accelerate the industry’s competitive reshuffling and also bring mid-term development opportunities. Against the backdrop of the global energy transition, the strategic value of photovoltaics has not been weakened; instead, it has become even more prominent due to major changes in international energy patterns and the emergence of new application scenarios. The market’s focus is on which photovoltaic companies can better adapt to market-oriented competition and seize valuation-repair opportunities driven by expectations of an operating performance rebound,” the analyst said.

Recently, international oil prices have broken through the $100 per barrel threshold. Combined with continued regional tensions in the Middle East, the strategic position of clean energy has been elevated again. At the same time, on the domestic policy front, positive signals have been released—this year’s Government Work Report for the first time includes “power and computing coordination” in its text, making the roles of photovoltaics and energy storage in providing power for AI data centers increasingly critical. As AI computing demand grows explosively, data center electricity consumption is rising exponentially, and green power solutions combining photovoltaics + energy storage are entering a new round of development opportunities.

The analyst believes that after this round of industry reshuffling, leading companies are expected to be the first to enjoy dividends from improvements in the competitive landscape, thanks to multiple moats.

From the cost perspective, leading companies with a complete integrated layout and strong financial capacity have capacity matched across every link—polysilicon, wafers, cells, and modules. They can buffer price fluctuations through internal coordination. From a technology perspective, new-generation high-efficiency technology routes such as BC cells and HJT are widening the generation gap. With mass-production conversion efficiency higher by 1.5 to 2 percentage points than conventional PERC cells, it means that under the same conditions, electricity generation increases significantly. This technological premium can effectively offset cost pressure. From the channel and brand perspective, companies that have established sales networks and brand recognition in the top ten photovoltaic markets worldwide have far stronger pricing power than players that rely purely on contract manufacturing or participation in a single market. They are also better positioned to extend into high-value-added areas such as system solutions, intelligent O&M, and energy storage integration.

(Source: First Financial Daily)