Tighter solar oversight in China to lift sentiment

Sentiment in China’s solar market has turned more positive following stronger regulatory oversight, although the effects have yet to be fully seen on downstream prices, industry sources say.

According to a top-10 producer source, prices have rebounded from historic lows across the value chain under tighter regulatory oversight since a symposium held in early July by the Ministry of Industry and Information Technology or MIIT.

Even so, downstream gains have lagged behind upstream increases. Downstream market players remain cautious, arguing that end-users are resisting higher prices, leaving cell and module margins squeezed relative to upstream segments.

Since July 1, OPIS EXW China Mono Premium polysilicon rose 31.7%, and FOB China N-type M10 wafers rose 29.0%. In contrast, OPIS FOB China N-type M10 cells rose 22.4%, and FOB China N-type modules rose only 3.7%.

“It is difficult to predict the direction from here,” said one producer. “Prices may have stabilized, but if polysilicon producers coordinate further, downstream players will have little choice but to absorb higher costs,” the source added.

Another tier-1 manufacturer stressed that “only strong enforcement” from policymakers could shift pricing dynamics in a meaningful way.

At an expanded photovoltaic symposium organized by the MIIT on Tuesday, manufacturers were instructed to “produce according to demand” under tighter
quota-based production controls and closer inspections. Power generation companies pledged to increase transparency in the tender process and adopt more rational bidding practices.

Sources close to participating companies said stricter measures were discussed but not officially disclosed. These included banning sales, bids and exports
below full cost, as well as revisions to pricing laws expected to be finalized by year-end, that would formally define such practices as illegal.

A top-five manufacturer noted that developer involvement could make the measures more effective, as developers may start budgeting projects with higher
module prices in mind.

The key question, the source added, is whether developers will ease internal return requirements under the new policy direction, enabling projects to proceed despite higher costs and supporting demand growth.

Market insiders also highlighted the unusually high confidentiality surrounding the meeting. “Many PV firms are listed entities, and strong policy guidance can directly impact performance expectations. Some measures may favor certain types or sizes of companies over others, which could face resistance if prematurely disclosed,” one insider commented.

Expanded Scope and Authority

Tuesday’s meeting, held with five other government bodies, industry associations, manufacturers and power companies, was aimed at curbing disorderly competition in the solar sector, and was the second MIIT-led symposium in the second half of 2025.

Unlike the July 3 session, which primarily involved MIIT, solar associations and manufacturers, the Aug. 19 meeting was broader in scope and authority. It brought together multiple government agencies, state-owned enterprises, project developers, and other value-chain stakeholders, making it the most comprehensive government-led effort since the PV industry suffered widespread financial losses in 2024.

Market participants said that the agenda was more expansive and strategic, with an emphasis on long-term structural reforms.

An official release laid out four main priorities for the symposium:

– Stronger Regulation – Enhance oversight of project investments and phase out outdated capacity using market-based and law-based mechanisms;

– Curb Low-Price Competition – Strengthen price monitoring, improve pricing mechanisms, and enforce strict regulations against below-cost sales and false
marketing;

– Quality Enforcement – Prevent product downgrades, misrepresentation of power ratings, and intellectual property infringements; and

– Industry Self-Discipline – Empower associations to promote fair competition, innovation, and strict adherence to quality standards.

Impact on Prices and Sentiment

There were rumors following the recent meeting that regulators and industry associations may set a minimum domestic module sale price above 0.75 yuan per watt peak ($0.10/wp), although this could not be confirmed.

“We heard of this news, but it’s hard to know if this is true,” a tier-1 producer said, adding that information in the market is chaotic and “we will just have to wait and see”.

Several industry sources stated that while there is some room for module price increases, sustaining the higher price floor may be challenging. “I think this
[minimum sale] price may be hard to reach. We need to watch supply and demand, as the final price will still depend on the inventory levels,” a downstream
producer source said.

On Aug. 19, OPIS assessed FOB China TOPCon M10 modules at 0.685 yuan/wp EXW, unchanged from the previous week.

Looming Export Tax Rebate Policy

At the same time, industry focus has shifted to potential revisions of China’s solar export tax rebate policy, which could substantially reshape manufacturers’ export cost structures.

At the July 30 meeting of the Communist Party’s Political Bureau, the proposal to “optimize export tax rebates” was included in discussions on the 15th Five-Year Plan.

While the measure aligns with directives from earlier government meetings to stabilize prices at more sustainable levels, market participants cautioned that
it may hinder manufacturers’ efforts to restore profitability.

Although no formal update has been issued, sources told OPIS that a second adjustment appears likely, following the December 2024 reduction of the rebate from 13% to 9%. Authorities are weighing a further cut to 5%, or even a complete withdrawal of the rebate, with implementation expected between
September 2025 and January 2026.

Such a move would reduce incentives for exporters to undercut prices, as lower rebates would erode margins on discounted shipments. Sources said anticipation of the policy change has already prompted front-loaded deliveries in August, with some new contracts including cost-sharing clauses to account for possible rebate cuts. Existing agreements are also being renegotiated under similar terms.

“There’s no reason for China to subsidize international buyers under today’s margin squeeze,” a top-10 manufacturer commented.

Nonetheless, many industry participants argue that gradual, phased adjustments would be preferable, as higher costs from reduced rebates may not be fully
absorbed by end markets. A strong pushback from manufacturers could also delay or complicate the rollout of the final policy, sources said.

— Reporting by Brian Ng, bng@opisnet.com; Summer Zhang, szhang@opisnet.com