In 2025, China's photovoltaic (PV) industry will focus on curbing production and clearing excess capacity. Since early December, several upstream solar PV companies have reached production reduction agreements and implemented a quota system. Leading firms like LONGi and GCL Group are actively participating, signaling a clear move toward capacity reduction, although specific quotas remain undisclosed. GL Consulting will continue monitoring these developments.
To counteract price declines due to overcapacity, China reduced the export tax rebate rate for PV products from 13% to 9% starting December 1, 2024. This change requires a 0.03 yuan/W increase in export prices to maintain profitability. However, the market remains cautious about price hikes, with the policy's impact expected to become clearer in 2025.
Policy measures will continue to drive out excess capacity in the sector. The Central Economic Work Conference emphasized intensified efforts to address excessive domestic competition in 2025, with the PV industry as a key target. In addition to lowering export rebates, the Ministry of Industry and Information Technology (MIIT) has raised the capital and technical thresholds for new solar PV projects. As Chinese solar PV products dominate the global market, there is speculation that a full phase-out of tax rebates may be implemented, which could further stimulate domestic price increases.
Eliminating the rebates would add 0.1 yuan/W in tax costs, but Chinese PV products remain competitive globally, versus prices in India, Europe, and the U.S. ranging between $0.095/W and $0.3/W since early December.
The above content is the major conclusions and highlights extracted from China (Energy Transition) Policy Perspective. To get detailed full text, send an email to glconsulting@mysteel.com.
