Workers produce high-efficiency PV modules for overseas orders at a solar factory in Haian, Jiangsu province, on April 29. GU HUAXIA/FOR CHINA DAILY

China's solar power industry is entering a mature phase of stable pricing and high-quality manufacturing, following the recent removal of a key export tax rebate, which ends a prolonged era of volume-driven price wars and forces weaker, subsidy-reliant manufacturers out of the market.

Following the removal of a key value-added tax rebate for solar exports starting April, industry insiders and market analysts observe that a profound structural shake-up is actively underway.

The policy shift is acting as a powerful catalyst, forcing weaker, subsidy-reliant manufacturers out of the market while accelerating a much-needed return to long-term value, they say.

"This policy marks a critical turning point for the entire industry," noted Chen Jiahui, a senior solar market analyst from Shanghai Metals Market, a metal information provider in China.

"Top-tier Chinese manufacturers are pivoting from simply exporting basic components to delivering localized, high-efficiency power systems. This will fundamentally shift the core logic of the market from pure supply-and-demand volume to long-term cost efficiency, technological upgrades, and comprehensive service," he said.

Designed to rein in irrational price competition and eliminate outdated production capacity, the policy completely eliminated the 9 percent VAT export tax rebate for photovoltaic products — including silicon wafers, solar cells, and modules — effective April 1.

In addition, to encourage domestic enterprises to focus on core technological breakthroughs rather than rely on export subsidies, the export tax rebate rate for battery products was reduced from 9 to 6 percent starting April 1 and will be entirely phased out from Jan 1, 2027.

This definitive cancellation of the export rebate marks the second major recalibration of China's solar fiscal policy in over a year, following an initial reduction of the rebate rate from 13 to 9 percent in December 2024, said Lin Boqiang, head of the China Institute for Studies in Energy Policy at Xiamen University.

Lin described this environment as a "survival of the fittest" landscape.

"For top-tier manufacturers equipped with vertically integrated supply chains, advanced technology, and strong brand pricing power, the policy shift is a golden opportunity to consolidate their dominance," he said.

"These firms can absorb cost fluctuations through internal optimization and expand their overseas asset-light production bases."

Conversely, for smaller manufacturers lacking technical advantages and heavily reliant on low-price dumping to survive, the removal of the tax rebate poses an existential threat, Lin added.

The era of "involution" — relentless, margin-crushing internal competition — is yielding to a healthy environment where price competition gives way to value competition, Lin said.

According to Chen, anticipating potential cost variations, overseas buyers have proactively secured extensive orders to ensure steady supply chains.

Data from Chinese customs reveal that solar panel exports reached a record high this March, rising 125 percent month-on-month and 67 percent year-on-year in value terms to $3.61 billion.

According to research firm Trend-Force, total first quarter module exports reached between 80 and 100 gigawatts, effectively covering more than a third of the anticipated global demand for the entire year.

Consequently, the second quarter is projected to be a period of rational recalibration. Export volumes are expected to stabilize as international channels digest their massive first quarter inventories, paving the way for a steady, healthy market recovery in the third and fourth quarters.

Amy Fang, a senior analyst at PV consultancy InfoLink Consulting, noted that the robust performance across both module and cell segments in March was a direct result of manufacturers rushing to ship products before the April policy adjustment took effect. She highlighted that while Europe and the Asia-Pacific region remained the primary drivers of this export wave, Africa stood out as a significant emerging growth engine.

Echoing this sentiment, S&P Global analyst Jessica Jin attributed the export boom to both the impending rebate elimination and enhanced profit margins driven by cheaper silver.

However, she cautioned that these massive export figures do not strictly mirror actual downstream consumption. Instead of reaching end-users immediately, a portion of these shipments was likely stockpiled at overseas production facilities or intermediate transit hubs, Jin explained.

Nations across Southeast Asia and Africa, for example, aggressively stockpiled components to beat the April 1 rebate cancellation. Simultaneously, the rippling effects of geopolitical tensions in the Middle East, which raised the specter of fossil fuel supply disruptions, deeply amplified the global urgency to secure independent, renewable energy infrastructure.

"Countries are importing solar panels at record levels and building up their own domestic assembly and manufacturing capabilities to address surging global demand," said Euan Graham, a senior analyst at energy think tank Ember.

Beyond the sheer volume of shipments, China is also moving up the global value chain by exporting more advanced, high-tech solar components.

Chen from SMM points out that while fully assembled modules remain the primary export, accounting for 67 percent of the total, shipments of higher-value solar cells have become the fastest-growing segment, and now comprise 18 percent. Wafers and polysilicon account for 9 percent and 4 percent, respectively.

The geographic footprint of China's exports is also transforming. While traditional markets like the United States and Europe see varying degrees of stabilization, emerging markets have become the primary engines of mid-to-long-term growth, he said.

Exports to the Association of Southeast Asian Nations have grown by 29.4 percent, while shipments to Africa have surged by nearly 50 percent, illustrating a rapidly expanding global market share in the Global South.

According to Chen, for overseas end-users, the policy shift presents a scenario of short-term cost fluctuations, but profound long-term benefits.

While procurement costs may see a slight, temporary rise, the market's return to rationality guarantees that international buyers will receive vastly improved product stability, technological quality, and comprehensive after-sales service, hence avoiding the hidden operational risks inherent in ultra-cheap, low-tier equipment, he said.

This drive to eliminate low-end overcapacity and prioritize high-quality exports mirrors a broader, systemic pivot within China's domestic green energy strategy.

Having already established the world's most extensive renewable energy supply chain, Beijing is systematically transitioning from a phase of explosive capacity expansion to one focused on efficient integration and actual energy utilization.

In tandem with upgrading the quality of its global offerings, the authorities are taking decisive steps at home to address rising curtailment rates — where clean power is wasted because local grids cannot absorb the rapid influx of wind and solar generation. To break this domestic bottleneck and ensure the green energy produced is actually used, policymakers are turning their attention to the demand side.

China has laid out broad new rules that mandate increased use of renewables as it continues to shift the focus of its energy transition from building new generation to ensuring it gets consumed.

Starting Aug 1, the government will implement binding targets for renewable energy consumption. This marks a strategic shift in China's energy transition — moving away from the massive capacity expansion seen in recent years toward combating power curtailment and ensuring clean electricity is actually utilized.

Under the new rules, regions and companies will face strict quarterly monitoring and annual evaluations. Those failing to meet their clean energy quotas will be required to purchase green electricity certificates, a move expected to boost revenue for solar and wind farms.

The mandate also covers nonelectric energy uses, such as heating and green fuels, which are poised to spur demand for critical emerging sectors like green hydrogen.

This domestic push for system integration and higher energy utilization aligns perfectly with what Chinese enterprises are now offering their global customers: comprehensive, high-value solutions rather than just raw components.

"Today, solar energy has become an affordable and clean power source for many parts of Africa, allowing local people to access electricity and live better lives," said Zhong Baoshen, chairman of Longi Green Energy Technology, a leading Chinese PV manufacturer.

Showcasing this shift toward advanced applications, Longi recently dispatched a massive 30-megawatt-hour energy storage system to the African continent. This shipment marks a substantial breakthrough for the company's "solar-plus-storage microgrid" solution, a highly specialized system meticulously designed for the demanding environments of remote African mining operations.

These advanced overseas deployments build upon a remarkable track record. Over the past decade, by commanding more than 80 percent of global PV manufacturing capacity and leveraging unparalleled full-chain technological advantages, China's solar sector has miraculously driven the levelized cost of global solar electricity down by over 80 percent.

Today, as the export tax rebate policy officially concludes, it forces the entire domestic sector to permanently abandon low-end price wars, said Lin.

By redirecting its immense capabilities toward relentless technological innovation, advanced product iteration, and localized service optimization, China is nurturing a new generation of globally competitive, premium clean energy brands, he said.