China’s Solar Policy Shifts Impact Global Markets
In recent months, China’s photovoltaic (PV) industry has experienced significant policy shifts that have impacted both domestic and international markets. Two critical policies—commonly referred to as the “April 30th” and “May 31st” deadlines—have been central to these changes, leading to increased domestic demand, price fluctuations, and export constraints for solar panels.
“April 30th” On-Grid Policy
The “April 30th” policy mandates that all new solar power plants in China must be connected to the grid by this date. This directive has spurred a rush among developers to complete and connect their projects before the deadline, resulting in a surge in demand for solar panels. Consequently, this heightened demand has led to significant price increases for solar modules within the domestic market. Some PV module manufacturers are considering increasing prices by approximately RMB0.02 to RMB0.03 (US$0.0027 to US$0.004) per watt.
Additionally, the accelerated consumption of available stock has led to shortages, thereby limiting the availability of panels for export.
“May 31st” Electricity Tariff Bidding Policy
Following closely, the “May 31st” policy introduces a market-based mechanism for determining electricity tariffs for renewable energy projects. Under this policy, effective from June 1, 2025, new solar and wind projects in China will no longer receive fixed feed-in tariffs; instead, their electricity prices will be determined through market transactions. This shift aims to promote the sustainable development of renewable energy by allowing market dynamics to set prices.
The anticipation of this policy has prompted developers to expedite project completions before the deadline to secure existing tariff benefits. This urgency has further intensified domestic demand for solar panels, exacerbating supply shortages and limiting the availability of panels for international markets.
Impact on Export Markets
The combined effect of these policies has led to a constrained supply of Chinese-manufactured solar panels available for export. International buyers are experiencing delays and facing higher prices as domestic projects absorb the majority of the production capacity. In addition to domestic policy pressures, external factors such as the reduction of export tax rebates for solar products—from 13% to 9%—effective December 1, 2024, have further tightened export margins and influenced pricing strategies.
Conclusion
China’s recent policy changes in the PV sector underscore the country’s commitment to integrating renewable energy through market-oriented reforms. While these policies aim to promote sustainable development and efficient pricing mechanisms domestically, they have also led to increased prices and reduced availability of solar panels for export. Stakeholders in the global solar industry should closely monitor these developments, as they have significant implications for international project planning and pricing strategies.
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