China To Impose Consumption Tax on Solar Cells From 2027

China’s Ministry of Finance, General Administration of Customs, and State Taxation Administration have announced adjustments to the country’s battery consumption tax policy, introducing a new tax on photovoltaic (PV) cells after more than a decade of exemption.

According to the Announcement on Adjusting Consumption Tax Policies for Certain Batteries released on July 16, 2026, solar cells will be subject to a 2% consumption tax starting from April 1, 2027, with the rate increasing to 4% from April 1, 2028.

Since February 2015, China has imposed consumption tax on batteries and coatings, while solar cells were exempted to support the growth of the renewable energy industry. The latest policy marks the end of this long-standing exemption.

The announcement also introduces updated tax rules for other battery categories. From September 1, 2026, lithium-ion batteries, lithium primary batteries, nickel-metal hydride batteries, vanadium flow batteries, and mercury-free primary batteries will be subject to a 2% consumption tax, which will rise to 4% from September 1, 2027.

Meanwhile, emerging technologies including sodium-ion batteries, solid-state batteries, fuel cells, perovskite solar cells, tandem solar cells, and gallium arsenide solar cells will remain exempt from consumption tax until the end of 2028.

The new policy is expected to have an impact on China’s photovoltaic supply chain, potentially increasing upstream solar cell costs and influencing module pricing. However, the continued tax exemption for advanced PV technologies highlights China’s focus on encouraging innovation and the development of next-generation renewable energy solutions.