At the beginning of 2026, the photovoltaic industry witnessed dual changes at the policy level. With the complete cancellation of the value-added tax export rebate for photovoltaic products and the official interview and suspension of the industry self-discipline rumored in the industry, the policy support and implicit order that have lasted for a period of time are being withdrawn.
The market reacted sharply to this, with sentiment in the polysilicon market hitting rock bottom. On January 9, the main polysilicon contract 2605 plummeted, and silicon material stocks such as Daquan Energy (688303.SH) and Tongwei Co., Ltd. (600438.SH) all fell sharply during the week.
This signifies that China's photovoltaic industry will completely bid farewell to the policy cradle and is standing at a historic turning point. The interweaving of regulatory constraints and the gradual withdrawal of fiscal and tax support will form a completely different competitive landscape. Its impact on the operating performance of listed photovoltaic companies means that the industry's valuation system is facing restructuring.
The photovoltaic industry faces tough regulation at the start of the year
The Ministry of Finance and the State Taxation Administration recently announced that starting from April 1, 2026, the value-added tax (VAT) export rebate for photovoltaic and other products will be cancelled, marking the industry's entry into a "no tax rebate subsidy" stage. China's photovoltaic industry export tax rebate policy began in October 2013. In the past two years, the tax rebate rate has gradually decreased. From December 1, 2024, the export tax rebate rate for photovoltaic wafers, cells and modules has dropped from 13% to 9%, which was regarded as a transitional stage for the cancellation of tax rebates at that time.
It is worth noting the background of the cancellation of tax rebates. Since 2024, China's photovoltaic products have faced increasingly fierce competition in overseas markets, with export prices continuing to decline, showing a trend of "increasing quantity but decreasing price". In 2025, which has just passed, although China's photovoltaic exports hit a new historical high, enterprises, in order to seize overseas markets, have seen internal competition turn external, and the phenomenon of snatching markets at low prices is common. Coupled with the phased overcapacity and low prices in China, the entire industry has fallen into huge losses.
Meanwhile, self-regulation in the photovoltaic industry has entered a new stage. It is reported that on January 6, the State Administration for Market Regulation interviewed the China Photovoltaic Industry Association and leading silicon material enterprises such as Tongwei Co., Ltd., Daquan Energy, and Xinte Energy. It is understood that the main content of the meeting included通报有关垄断风险, putting forward clear rectification opinions and requirements for enterprises to do a good job in rectification, etc. The clear rectification requirements are as follows: enterprises are not allowed to agree on production capacity, capacity utilization rate, production and sales volume, and sales price; they are not allowed to carry out market division, output distribution, or profit distribution in any form through investment proportion; they are not allowed to conduct communication and coordination on information such as current and future prices, costs, and production and sales volume.
The market responded extremely quickly and sharply, with polysilicon futures plummeting for two consecutive days. On January 8, the main polysilicon futures contract dropped by 9%; on January 9, it fell another 8%, with the intraday low touching 50,080 yuan/ton. Stocks related to silicon materials also declined simultaneously.
The comprehensive self-discipline in the photovoltaic industry this round started in 2025. As upstream silicon material enterprises stepped up production cuts, the price of silicon materials stabilized and rebounded in the second half of that year, and leading manufacturers saw a significant reduction in losses in the third quarter.
Industry insiders interviewed by China Business News believe that this move is a partial suspension of the industry's self-discipline in the past, and photovoltaic enterprises can no longer rely on "tacit partners" to maintain price stability. "In the short term, self-disciplined behaviors have prevented further expansion of industry losses, and the initial results are worthy of recognition. We believe this is a temporary adjustment, mainly to eliminate concerns about anti-monopoly, rather than a complete shift. According to existing anti-monopoly regulations, the sales price must be higher than the production cost, which means that the price of polysilicon needs to be maintained at about 50 yuan per kilogram, slightly lower than the current spot price," a person in the photovoltaic industry told the reporter.
It is difficult to pass on price increases during the off-season of demand.
Export tax rebates used to be one of the important sources of profits for photovoltaic enterprises, while industry self-discipline stabilizes prices by controlling production, bringing the industry into a real "naked swimming" era, where the true supply and demand in the market will be the core factor determining the prices of the industrial chain.
Up to now, the prices of upstream silicon materials, silicon wafers, and solar cells have continued to rise, but the prices of downstream modules have relatively lagged behind, resulting in the erosion of profit margins for power station developers.
According to the release by the Silicon Industry Branch of the China Nonferrous Metals Industry Association last week, the average transaction price of polysilicon n-type recycled materials was 59,200 yuan per ton, up 9.83% week-on-week. The upward trend of silicon materials continued, and the pattern of loose supply remained unchanged. The price of silicon wafers rose more significantly. The average transaction price of N-type G10L monocrystalline silicon wafers was 1.31 yuan per piece, up 9.17% from before the holiday.
Although silicon wafer manufacturers have a strong willingness to maintain and raise prices, the prices in the terminal module sector have failed to follow the upward trend. Meanwhile, the cell sector has begun planning active production cuts to ease supply and demand pressures. InfoLink's weekly price review points out that driven by the rapid rise in silver prices, the cell sector is the first to bear significant cost pressures, which further boosts the expectation of price increases across the entire supply chain. The module sector has also started to reflect the increase in silver prices by raising their quotations.
From the demand side, the first quarter is the traditional off-season for the photovoltaic industry. Against the backdrop of relatively sluggish demand, there are numerous obstacles to the upward adjustment of module prices. This stalemate in price negotiations between upstream and downstream sectors led to a sharp reaction in the capital market last Friday, with stock prices of component and battery companies with high visibility in the photovoltaic sector generally falling, reflecting the market's concerns about the profit prospects of downstream sectors.
Whether the price increase is accepted and absorbed by the end market depends on demand, and there is still uncertainty at present. Component manufacturers are 'rushing to export' before the policy is implemented, which is somewhat similar to the rush to install in the first quarter of last year. It is not ruled out that this will advance the release of some enterprises' overseas orders. For leading manufacturers that have already achieved the integration of production and sales overseas, the impact of the cancellation of export tax rebates is relatively small," the aforementioned industry insider added.
Regarding the changes in demand in the photovoltaic industry in the first quarter, InfoLink pointed out that after entering the end-of-year period, the overall market demand continued to weaken. The execution volume of existing orders in the domestic market has gradually declined, and the visibility of new orders is limited; the overseas market has also slowed down the pace of goods pulling as the year draws to a close. Looking ahead to the beginning of the year, against the backdrop of seasonally weak demand and coupled with the recent market atmosphere of rising module prices, the purchasing attitude tends to be wait-and-see, and the visibility of orders in the first quarter is still insufficient.
Funds in the secondary market made a short-term panic exit.
The shift in the policy environment is forcing the capital market to conduct a "revaluation of value" for the photovoltaic sector. Under the dual pressure of the decline in the clear profit support from export tax rebates and the disappearance of the implicit order guarantee from industry self-discipline, the future fundamentals of photovoltaic enterprises have fallen into uncertainty.
Last week, a short-term collective withdrawal of funds significantly pressured valuations. From January 8 to 9, the photovoltaic sector suffered a massive sell-off: the main polysilicon futures contract fell 10.2% for the week, Tongwei Co., Ltd. dropped nearly 4% with increased trading volume on the 9th, GCL Technology (03800.HK) closed down 7.89%, and Daquan Energy fell more than 6%.
The increasingly fierce game in the capital market is the most direct manifestation of this confusion and repricing process. On the one hand, after the industry hit the bottom from 2024 to 2025, the overall valuation of the photovoltaic industry is at a historical low. Compared with high-valued industries such as technology and non-ferrous metals, the absolute valuation of photovoltaics is attractive. However, is photovoltaics attractive enough for capital allocation just by virtue of its advantage of low valuation?
A since last year, funds have been trying to find a new pricing anchor for photovoltaics, and this process is destined to be twists and turns for several reasons. First, the overall domestic demand is relatively sluggish, which cannot support the industrial chain price to form a more market-oriented inflection point; second, the pattern of the midstream links in the photovoltaic industry is relatively fragmented, making integration more difficult, and it is still unclear how the future anti-involution will evolve; third, when the policy turns again, under the requirement of 'not selling below cost price', the logic of price and profit recovery has changed. We believe that enterprises that simply rely on scale expansion and industrial chain integration may encounter more severe pricing challenges, and the market is worried about their profit resilience in fully market-oriented competition. Leading enterprises with significant advantages in technological iteration (such as BC and perovskite), cost control (such as silicon consumption and silver consumption), and global channel layout are more likely to be explored as individual stock opportunities," said the aforementioned analyst.
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