China imposes new consumption tax on PV cells, batteries amid industry consolidation push

China's Ministry of Finance (MOF) announced photovoltaic cells will be subject to a 2% consumption tax effective April 1, 2027. The tax rate will increase to 4% starting April 1, 2028. The tax is expected to accelerate capacity rationalization in China's solar industry by increasing cost pressures on already low-margin manufacturers and making inefficient production facilities increasingly unviable. While a 2%-4% consumption tax may appear modest, it could further squeeze profitability for manufacturers operating on thin or negative margins, potentially accelerating the retirement of outdated ...

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