Waaree Energies and other stock in focus after China announces gradual cut in solar export tax rebates

Synopsis: China’s April 2026 solar export rebate cut triggered the shares of Waaree Energies to jump above 5% and Premier Energies above 4%, driven by the increase in Chinese solar product prices, which will prevent dumping and open a new market share for Indian solar players in the global market.

China’s announcement to gradually decrease the export tax rebate on solar products from April 2026 is a positive and important development in the international trade policies of the solar industry. This comes as a positive effort to mitigate the issues of overcapacity as well as international trade pressures. Although it is too early to comment on the impact of the move, it might have a positive effect on the industry as a whole.

About the Rebate Reduction

China has made an important announcement regarding its export tax rebate policy, cancelling or lowering rebates for hundreds of goods, which is part of its strategy to reduce international trade tensions and respond to rising Chinese exports, which have raised concerns among its major trading partners. 

Beginning on April 1, 2026, the Chinese government will cancel Value Added Tax (VAT) export rebates for 249 goods, including major ones such as solar cells, ceramic roof tiles, and lithium hexafluorophosphate, as declared by the Chinese Ministry of Finance.

In addition, the export rebate rate for 22 battery-related goods, including lithium-ion batteries, will be lowered from 9% to 6%, and a total waiver is planned for January 1, 2027. This move is an important part of Chinese export policy, which is a response to export pressures from trading partners such as the European Union.

Economic and Global Market Implications

The cutback of rebates is poised to contribute to multi-layered impacts in China’s home economy and international market dynamics. As China pursues the reduction of export rebates, with the purpose of lessening the competitive incentives of lower export costs in photovoltaic and battery industries, it encourages managing overcapacity and strong competition in export markets. 

Market observers see this policy as potentially accelerating the withdrawal of less competitive exporters, who solely depend on rebates, thereby alleviating oversupply in international markets. However, this policy will further contribute to supporting China’s government finances, as export benefits of rebates have observably increased in the last few years, reaching nearly 2 trillion yuan ($286 billion) in export rebates as of late 2025.

Why did China decide on rebate reduction? 

China’s decision on removing export tax rebates on solar products can be largely associated with reducing damaging price wars triggered by strong overcapacity in China’s solar value chain. With the help of export incentives and rapid capacity expansion, China finds itself in a situation where it has a strong oversupply in the solar sector and marginal margins for solar producers in the country. 

Removing export tax rebates can be seen as China’s attempt to increase export prices and thus curb dumping and bring about a sense of normalisation in industry prices and profitability in the solar sector. In addition, it can also help alleviate rising trade tensions in the global solar market, where dumping and trade restrictions from countries like the US, the EU, and India increasingly target China’s solar exports.

Which segment will it impact?

The withdrawal of export tax rebates on solar cells and PV products from April 1, 2026, in China will impact the prices of major components of a solar power system in the international market. To date, the subsidies and tax rebates that China provided encouraged a reduction in the prices of solar cells and modules imported to India. 

Once the tax rebates are withdrawn in China, the prices of exports will increase or become stagnant rather than declining in the international market. This will help the Indian manufacturers of solar equipment have a relatively more balanced playing field in the international markets.

Two companies among many in focus

In India, it is solar cell and module manufacturing companies like Waaree Energies and Premier Energies that are most affected. Waaree Energies has widespread exports and also procures solar cells for manufacturing from other countries extensively, which makes it vulnerable to changes in both the cost of inputs and the global market dynamics of solar panels. 

Conversely, despite being small in size with limited or no exports, Premier Energies  is still vulnerable to global changes in solar cell and wafer prices because of the current manufacturing reliance in India, to a large extent, on imports of solar cells and solar wafers. 

The shares of Waaree Energies Ltd jumped more than 5%, and Premier Energies jumped more than 4% on this rebate news, as reduced rebates on solar products will provide Indian players with a better shift opportunity where, if Chinese products get more expensive, the Indian companies can grab the market opportunities left behind by Chinese firms. Other than solar manufacturing companies, solar project developers and EPC contractors like Adani Solar, Reliance Power, and Tata Power Solar are likely to be affected by input cost fluctuations in scenarios where Chinese solar components were always the lowest-cost imports until now.

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