In 2012, China introduced a new export tax policy aimed at reforming incentives for manufacturers, including the solar industry. In 2012, however, the government began gradually reducing these exemptions to bring them into line with international trade standards and to address concerns about unfair trade practices
The export duty rebate for photovoltaic (PV) products was reduced to 13% in 2012, a rate that was maintained for the next 12 years. The change is a broad-based approach to refraining from over-subsidizing Chinese exports and complying with the World Trade Organization (WTO) half rules can provide
Then, with effect from the November 2024 announcement, China decided to reduce the export duty on photovoltaic (PV) products from 13% to 9%. Effective December 1, 2024, the reforms reflect China’s efforts to reform its business and tax policies. The reductions are aimed at bringing it more in line with international trade standards and reducing subsidies paid to its solar business, especially as global competition intensifies and trade relations improve.
An export tax rebate is a financial incentive provided by governments to exporters, allowing them to reclaim a portion of the taxes they have paid during production. This incentive is important for China, the largest exporter of solar PV products, to maintain prices competitive in global markets.
This adjustment reflects China’s strategic intent to:
Indian businesses must act swiftly to address China’s Export Tax Rebate Policy changes. Solar developers should secure orders before December to lock in current prices and explore alternative suppliers to reduce reliance on China. Policymakers need to boost domestic solar manufacturing through incentives and international collaborations for diversified supply chains. Project financiers should reassess budgets, factor in rising costs, and promote advanced technologies to optimize project expenses. These steps will ensure competitiveness and support India’s renewable energy goals.
This policy change highlights the urgent need for India to reduce its reliance on imports and prioritize domestic solar manufacturing. Swift implementation of initiatives like the National Solar Mission and the PLI scheme is essential to protect and advance India’s renewable energy objectives while ensuring energy security and long-term sustainability.
For solar businesses in India, time is of the essence. Finalize orders now to secure current rates and begin strategizing for a future where local manufacturing plays a larger role. Proactive planning today can ensure a brighter, sustainable tomorrow.
By adopting a balanced approach and leveraging opportunities created by this policy shift, India can turn challenges into stepping stones toward energy self-reliance. Connect with experts to understand how this change might impact your projects and identify actionable solutions.
