On this weekend when A-shares were in mourning, photovoltaic people finally waited for a blockbuster news. The Ministry of Finance and the State Administration of Taxation issued an announcement on adjusting the export tax rebate policy. The full text is as follows:
The following is an announcement on the adjustment of the export tax rebate policy for aluminum and other products:
- Cancel the export tax rebate for aluminum, copper, and chemically modified animal, plant or microbial oils, fats and other products. See Appendix 1 for the specific product list.
- Reduce the export tax rebate rate for some finished oils, photovoltaics, batteries, and some non-metallic mineral products from 13% to 9%. See Appendix 2 for the specific product list.
- This announcement will take effect on December 1, 2024. The export tax rebate rate applicable to the products listed in this announcement is defined by the export date indicated on the export goods declaration form.
This announcement
The fewer words, the bigger the matter. What does this mean for photovoltaics?
In Appendix 2, Gantanhao noted that the photovoltaic products involved in this export tax rebate reduction include silicon wafers, batteries and modules:
Silicon wafers:
“Single crystal silicon wafers with a diameter of >15.24cm (doped for the electronics industry)” (commodity code 38180019);
Batteries:
“Photovoltaic cells not installed in modules or assembled into blocks” (commodity code 85414200);
Modules:
“Photovoltaic cells installed in modules or assembled into blocks” (commodity code 85414300)
What impact will the above three types of photovoltaic products have on the photovoltaic industry?
According to the statistics of the General Administration of Customs, in the first three quarters of this year, my country exported a total of 26.357 billion US dollars of the above-mentioned photovoltaic main materials. Among them, silicon wafers were 1.677 billion US dollars, battery cells were 1.921 billion US dollars, and photovoltaic modules were 22.760 billion US dollars.
According to the original 13% export tax rebate rate, enterprises will receive a tax rebate of 3.426 billion US dollars. After the adjustment, they will receive a tax rebate of 2.372 billion US dollars. After the adjustment, Chinese photovoltaic companies will reduce their export tax rebates by 1.054 billion US dollars.
At present, the photovoltaic market is in a serious vicious internal circulation, and the entire industry is in a state of cash loss. The impact of losing 1.054 billion US dollars in export tax rebates is not small. According to the statistics of Gantanhao, the photovoltaic industry index covers a total of 49 photovoltaic listed companies, and the net profit after deducting non-operating expenses in the first three quarters of this year was only 6.1 billion yuan.
In the third quarter of this year, the average exchange rate of RMB to US dollar was 7.1169. The 1.054 billion US dollars reduced by photovoltaic companies is about 7.5 billion yuan. This figure is more than the profits of major photovoltaic companies in my country combined!
Although the export tax rebate rate for photovoltaic products has only been reduced by 4%, this has already cost many photovoltaic companies their lives. In the first three quarters of this year, the net profit margin of most photovoltaic companies did not reach 13%.
In addition to photovoltaic main materials, the export tax rebate rate has been reduced this time, including 56 types of products such as lithium-ion batteries, but not electric vehicles.
What does this mean behind it?
Gan Tanhao believes that this is an important measure to reduce overcapacity.
In the past two days, the Photovoltaic Industry Association has continued to convene photovoltaic companies to prevent vicious internal circulation through industry self-discipline such as production and price limits. Several meetings have been held before and after. The effect of the meeting is that at least a consensus has been reached among the leading companies. But nothing can be more direct and effective than directly reducing the export tax rebate rate for clearing the industry’s production capacity!
For leading companies with overseas market, channel and brand advantages, the above tax rebate factors can be superimposed on the commodity price in the 2025 orders. However, not all photovoltaic companies have this premium ability in the overseas market. For companies with weak strength, their overseas market share may be eroded by leading companies.
In addition, since the regulation has been implemented since December 1 this year, the products delivered overseas by Chinese photovoltaic companies in December this year have obviously not taken this change into consideration, and most likely can only be implemented according to the terms agreed with overseas customers. The financial statements of photovoltaic companies in the fourth quarter of this year are already ugly enough, and this factor is superimposed, which is estimated to be even uglier.
Why is there no one-time cancellation of the export tax rebate rate for photovoltaic main materials?
You have to eat one bite at a time and walk one step at a time. If it is done in one step, it is estimated that the financial statements of all photovoltaic companies will explode directly.
A phenomenon worthy of attention is that in markets such as South America, some Chinese leading photovoltaic companies are selling goods at low prices. Although the shipping costs are superimposed, the selling price is even cheaper than that in China. The reason why these companies dare to ship goods in this way is because of the 13% export tax rebate. If there is no export tax rebate, such a sale will lose money without even underwear. So, whose generosity are these companies generously doing? It is nothing more than the country’s support policy for photovoltaic new energy products.
In other words, it is precisely this 13% that guarantees a good harvest regardless of drought or flood that has caused the price of Chinese photovoltaic components to spiral, and the war has spread from the domestic market to overseas, even triggering complaints and sanctions from European and American countries:
Your Chinese photovoltaic products are sold too cheaply, which directly has a huge impact on the photovoltaic manufacturing industry in the importing countries, causing their companies to go bankrupt and workers to lose their jobs.
From this point of view, reducing the export tax rebate rate may have an impact on the profits of export-oriented photovoltaic companies in the short term, but as long as the next overseas customer fulfillment cycle is entered, this negative impact may be resolved, which is reflected in the fact that the price of Chinese photovoltaic products will be at least 4% more expensive than in 2024.
To be honest, let alone 4%, even if our selling price is increased by 40% on the existing basis, the photovoltaic manufacturing capacity of the importing countries may not be able to compete with Chinese companies.
Another impact is the overseas capacity of Chinese photovoltaic companies.
There is no need to mention the photovoltaic products of the four Southeast Asian countries that have already died down, but the comparative advantage of the newly built photovoltaic capacity in the Middle East will be more obvious. Affected by the US “double anti-dumping”, China’s locally produced photovoltaic products are mainly exported to markets such as Asia, Africa, Latin America and Europe. After the tax rate of export tax rebates is reduced, overseas production capacity has a 4% advantage over domestic production capacity.
In addition, lowering the tax rate of export tax rebates seems to be only the first step. It is possible to further reduce or even completely cancel it in the future.
So, what preparations should photovoltaic companies make for this?
