On January 9, 2026, the Ministry of Finance and the State Taxation Administration of China issued an announcement clarifying that the value-added tax (VAT) export rebate for products such as photovoltaic silicon wafers, cells, and modules will be canceled effective April 1, 2026.
This adjustment represents a continuation of the regulatory trajectory initiated in November 2024, when the VAT export rebate rate was reduced from 13% to 9%. The latest measure establishes a complete policy cycle by eliminating the rebate entirely for photovoltaic products including silicon wafers, cells, and modules.
The policy will take effect based on the date of customs declaration for export, thereby providing enterprises with an adjustment window of approximately three months.
I. Direct Impact: Significant Rise in Export Costs, Further Squeeze on Profit Margins
Currently, China's PV product exports generally apply a 9% VAT. Based on the mainstream N-type TOPCon module FOB price of approximately US $0.1/W (about Yuan 0.72/W), canceling the 9% rebate will directly increase the cost per watt for enterprises by about Yuan 0.06. In the cell segment, the cost per watt will also rise by approximately Yuan 0.03-0.04 after April 2026.
Although the export volume of silicon wafer is far lower than that of cells and modules, the rebate cancellation will still increase costs for exporters, adding about Yuan 0.01-0.015 per watt.
For manufacturers with gross margins generally below 10%, this undoubtedly presents a severe cost challenge. Specialized manufacturers and small-to-medium exporters will be hit particularly hard.
While integrated leaders can partially hedge risks through internal coordination and overseas localization, many second-tier enterprises heavily reliant on exports and lacking overseas production capacity will face dual pressures of "losing price competitiveness" or "order attrition."
Source: Mysteel
II. Industry Chain Transmission: Pressure From Modules to Wafers
The rise in export costs will quickly transmit upstream. To maintain overseas competitiveness, module manufacturers will inevitably pressure upstream suppliers for lower prices, further compressing profit margins for the cell, silicon wafer, and polysilicon players.
Against the backdrop of the industry already operating at low profitability or even losses, this policy may act as a catalyst to accelerate capacity consolidation.
Since the PV export rebate policy was announced last Friday January 9, leading module manufacturers have proactively raised quotes to Yuan 0.8/W and above, with second and third-tier companies following suit with quotations between Yuan 0.76-0.78/W.
Meanwhile, overseas customers are likely to lock in orders early before the prices increase after April, driving a short-term surge in PV module exports. Some leading enterprises have begun adjusting production plans, recalling workers from early holiday leave to resume work in response to the upcoming order peak. Overseas distributors are also showing signs of stockpiling.
However, behind this rush for orders, module manufacturers still face dual challenges. On one hand, the rebate cancellation directly increases export costs, squeezing corporate profit margins. On the other hand, current overseas inventory levels in the module segment are relatively high, essentially covering demand until the end of the first half of 2026.
Domestically, demand is currently in a seasonal lull, making it difficult to digest existing inventory. Once this production rush ends, market supply-demand imbalances may emerge, putting downward pressure on module prices.
The cell segment faces significant cost pressure due to soaring prices of auxiliary materials like silver paste. Coupled with downstream module production rush, it has become the segment with the firmest price increases in the current industry chain, with price hikes serving as the core means to counter the policy shock.
Market performance shows current mainstream domestic cell transaction prices have risen to Yuan 0.40-0.41/W, with export transaction prices reaching Yuan 0.42/W and above.
However, according to Mysteel's analysis, cell price increases also face constraints. First, end-user demand remains in a seasonal lull, with slow progress on domestic PV projects. Although overseas procurement shows signs of rushing, large-scale volume transactions have not yet materialized. High-priced cell transactions are mainly concentrated among leading enterprises, while second and third-tier companies still face sales pressure.
Second, it is difficult to fully pass on increased cell export costs to overseas customers, whose acceptance of price hikes is limited, continuing to compress export profit margins for enterprises.
Third, if the downward trend in silicon wafer prices persists, it will undermine cost support for cells, making subsequent price increases unsustainable.
Meanwhile, silicon wafers have also been included in this rebate cancellation, becoming the first upstream segment directly affected by the policy. Combined with its own supply-demand imbalance, silicon wafer prices have weakened recently.
On one hand, previous large-scale production increases by wafer enterprises have already led to oversupply. Even though production in December 2025 fell 14.75% month-on-month, the inventory pressure is not fully resolved. On the other hand, although downstream cell manufacturers have raised the prices, actual procurement is primarily for rigid demand. Furthermore, cells themselves face constraints from weak end-user demand, making it difficult to sustainably increase procurement volumes for wafers.
Additionally, while the decline in polysilicon prices originally provided a cost buffer for silicon wafer manufacturers, the cost impact from the rebate cancellation, combined with downstream players pushing for lower prices, has compelled wafer producers to reduce prices and sacrifice margins.
Overall, this PV export rebate cancellation policy is not merely a simple cost adjustment but an important driver pushing different segments of the industry chain toward differentiation and value restructuring.
Centering module and cell price increases alongside weakening wafer and polysilicon prices, it reflects the market response of each segment to the policy shock, considering their own supply-demand dynamics and export reliance.
In the short term, the industry will experience a rush for exports, with price negotiations and cost transmission across segments becoming the main theme. However, current overseas inventory levels in the module segment are relatively high, essentially covering demand until mid-year. Coupled with the domestic demand lull, actual digestion capacity is limited. Furthermore, different overseas markets will respond to the rebate policy implementation with varying time lags.
According to Mysteel's estimates, starting in March 2026, module prices may gradually enter a slow downward trajectory. In the long run, this rebate cancellation will drive the elimination of outdated capacity across the entire industry chain, making technological innovation, cost control, and globalized layout the core competitiveness of enterprises.
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