Chinese government cancels subsidy for modules and batteries, impacting the Brazilian market.

The price of photovoltaic modules and batteries is expected to increase in Brazil and other international markets starting in the second quarter of 2026, following a significant change in its fiscal policy recently announced by the Chinese government.

Starting April 1st of this year, VAT refunds will be cancelled (Value-Added Tax), tax incentive granted by China to exports. Until then, certain photovoltaic products exported by the Asian country benefited from a VAT refund of up to 9%, a mechanism that helped reduce the final price of this equipment in the international market. 

With the new directive, the incentive will be completely eliminated for photovoltaic modules starting April 1, 2026. For batteries, the Chinese government will adopt a gradual transition: The subsidy will be reduced from 9% to 6% between April and December 2026, and then completely cancelled from January 1, 2027. 

In practice, this means that Chinese manufacturers will no longer receive this tax credit for products covered by the new rule, which is likely to be incorporated into export prices. This measure directly affects the prices of technologies acquired by countries outside of China, including Brazil – where more than 90% of the equipment used in the solar sector is manufactured and imported from the Asian country.

This week, the Canal Solar anticipated, firsthand, the information that the Prices for photovoltaic modules are expected to rise in Brazil in 2026.The official decision by the Chinese government reinforces this scenario.

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