China ends VAT Rebates on Solar Exports – Implications for UK Solar PV in 2026
Published: January 2026 | By Alternergy
China’s Ministry of Finance and State Taxation Administration has issued an official announcement adjusting export tax rebates for photovoltaic (PV) products and battery goods — a policy with direct implications for the global PV supply chain and UK installers.
This update should be read in context with our Global Solar Panel Market Update – August 2025, which highlighted early warning signs of rising UK module prices and supply tightening due to Chinese regulatory shifts, raw material supply adjustments, and currency pressures. Today’s policy confirms and accelerates some of those trends.
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What’s Changed?
Solar Panels
- 1st April 2026: 9% VAT export rebate to be cancelled
Battery Products
- 1st April 2026: 9% VAT export rebate reduced to 6%
- 1st January 2027: Remaining 6% VAT export rebate to be cancelled
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Why this matters for UK PV installers
1. Direct cost impact
As highlighted in our August 2025 update, China’s export rebates have historically helped keep module and battery pricing competitive for international buyers. Cancelling or reducing these rebates will increase export costs, which are expected to feed directly into UK wholesale prices. Installers may notice upward price pressure on solar panels and batteries from Q2 2026 onwards.
2. Supply chain implications
This policy shift compounds broader trends already affecting UK procurement:
- Polysilicon supply reductions: In 2025, leading Chinese producers introduced a $7 billion fund to shutter inefficient capacity, removing around 38% of total production.
- PV glass production cuts: Key manufacturers, including Flat Glass Group and Hainan Development, have reduced PV glass output following Government guidance.
- Regulatory interventions: The China Photovoltaic Industry Association (CPIA) has introduced floor prices for modules to prevent selling below cost.
Taken together, these measures tighten supply and reduce pricing flexibility for UK importers.
3. Currency and cost compounding
A possible weakening of the British Pound relative to the Chinese Yuan adds a secondary effect, increasing the relative cost of Chinese exports. The combination of rebate removal and currency pressures creates a “double hit” for UK installers sourcing panels or batteries from China.
4. Battery market considerations
The staged reduction of VAT export rebates on batteries signals a significant shift in incentives, potentially affecting storage pricing later in 2026 and into 2027. Forward-looking procurement planning is recommended for projects that rely on battery storage solutions.
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How this ties into our August 2025 analysis
In our Global Solar Panel Market Update – August 2025, we outlined:
- The potential cancellation of China’s 9% export rebate and its implications for UK prices.
- Direct cost increases due to higher export costs from China.
- Shifts in industry strategy through floor pricing and overseas production expansion.
- Compounding currency pressures from a weaker Pound.
- Broader supply chain impacts due to PV glass and polysilicon reductions.
The current policy confirms those trends, with official timing and rebate reduction schedules now defined.
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Strategic takeaways for UK installers
✔ Review procurement strategies: Forward ordering may help lock in pricing before rebate changes fully impact supply costs.
✔ Plan for battery costs: Monitor pricing shifts as VAT rebate reductions take effect in stages.
✔ Partner with trusted distributors: Working with experienced solar partners like Alternergy can mitigate supply chain risk and help secure Tier 1 products.
How Alternergy can help
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At Alternergy, we support UK solar professionals through evolving market conditions - from sourcing modules to advising on project planning and global pricing trends. Speak to us to see how we can strengthen your pricing strategy and help you plan confidently in a changing market.
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→ Official announcement
Translation of the original Ministry of Finance announcement (China, 9 January 2026):
"Two departments announced that, starting April 1st, export tax rebates for photovoltaic and other products will be cancelled."
The Ministry of Finance and the State Taxation Administration issued an announcement on adjusting the export tax rebate policy for photovoltaic and other products.
The following announcement is made regarding the adjustment of export tax rebate policies for photovoltaic and other products:
I. Starting from April 1, 2026, the export tax rebate for photovoltaic and other products will be cancelled."
II. From April 1, 2026 to December 31, 2026, the export VAT rebate rate for battery products will be reduced from 9% to 6%; from January 1, 2027, the export VAT rebate for battery products will be cancelled.
Third, for the products subject to consumption tax among the above-mentioned products, the export consumption tax policy will not be adjusted, and the consumption tax refund (exemption) policy will continue to apply.
IV. The export tax rebate rate applicable to the products listed in this announcement shall be determined by the export date indicated on the export customs declaration.