When China tweaks its export policies, the ripples are felt across the world’s energy markets. So, when Beijing quietly trimmed its solar export tax rebate from 13% to 9% on December 1, 2024, the question wasn’t whether anyone would notice—it was who would feel it most, and how soon.
For a country that supplies more than four-fifths of the world’s solar modules, even a small change on paper could, in theory, shift billions of dollars in trade flows, jolt global prices, and test the energy ambitions of import-reliant nations like Pakistan. Yet nine months on, the reality tells a more complicated story—one of stubborn oversupply, shifting trade routes, and a Pakistan that has doubled down on Chinese solar despite policy turbulence at home.
The rebate cut was part of a broader policy adjustment that also affected aluminium, copper, batteries, and refined oil products, and was framed as a strategic move to ease overcapacity, curb low-margin exports, channel more supply into China’s own renewable rollout, and reduce friction with trading partners over subsidies.
But despite fears that this change could trigger a sharp rise in solar prices or a collapse in shipments, the numbers tell a different story. In the first half of 2025, Chinese module exports totalled around 127 GW, just 3% less than the same period a year earlier. Industry experts opine that the bigger change came in solar cell exports, which surged by roughly 70% as more countries moved assembly in-house. Export values fell sharply—about 26% lower year-on-year—because prices stayed near record lows.
Expert resources tell BR Research that by late 2024, modules were selling for about $0.09/W FOB China, and through mid-2025 they hovered between $0.08 and $0.09/W.Brief upticks followed Beijing’s call to end “price wars,” but oversupply continued to set the tone.
Trade flows shifted too. Europe slowed imports after a stockpiling spree in 2024, while the Global South accelerated. Pakistan was a standout, importing around 16.6 GW from China in 2024 and another 10 GW in just the first four months of 2025—around 12% of China’s module exports early in the year. Between January and April 2025, solar met roughly a quarter of Pakistan’s utility electricity needs. This surge came despite talk of reducing net-metering buyback rates, revising rooftop rules, and imposing a 10% import duty. For now, ultra-cheap Chinese hardware outweighed the uncertainty.
For Pakistan, the rebate cut’s direct price effect has been negligible. At $0.09/W, a four-percentage-point cut in the rebate adds just $0.0036/W—around Rs 10,000–11,000 on a 10 kW system, an amount lost in the rounding of total project costs. Prices stayed low, exports remained plentiful, and the market glut continued to dominate. If prices do rise later in 2025 or 2026, the bigger triggers will be domestic policy shifts, tax changes, and currency movements, with only a minor role for any lasting Chinese price discipline.
The Finance Act 2025 replaced a full sales-tax exemption with a 10% GST on imported panels, and planned changes to net metering could see buyback rates cut to Rs 10–11 per unit, reshaping project economics. A weaker rupee would directly inflate import costs, while a genuine price floor in China could add $0.005–0.01/W. Freight rates, now easing to around $2,400–2,500 per 40-foot container, are currently helping rather than hurting as per industry experts.
Battery economics could also shift if net metering changes push rooftop owners toward storage, allowing them to use surplus power themselves instead of selling to the grid at low rates. China cut the export rebate on batteries as well, but global oversupply from the EV sector has kept prices low. For Pakistan, the bigger risks are local distributor markups if demand spikes and exchange-rate swings. Even with a 4–5% global price rise, batteries could remain attractive if gross metering significantly erodes export revenue.
Over the longer term, China’s policy points to a gradual rebalancing toward domestic renewable deployment and higher-value exports, with emerging markets likely to absorb a larger share of its overseas shipments as developed economies tighten trade rules. Mild price stabilization is possible if Beijing reins in overcapacity, creating space for other producers like Vietnam, Malaysia, Turkey, and the UAE—though at higher costs.
For Pakistan, the strategic challenge is clear: with over 90% of its PV imports coming from China, it remains vulnerable to supply and pricing shifts beyond its control. Diversification would mean higher costs, but could start with local module assembly and testing, building toward upstream manufacturing through joint ventures. Securing supply will also require policy planning for recycling, currency risk, and alternative sourcing.
In the end, the December 2024 rebate cut has barely budged global or Pakistani solar prices. Oversupply is still the key driver, and Pakistan’s imports have continued at pace. In the short term, local taxes, currency stability, and net-metering reforms will shape solar affordability far more than China’s rebate mechanics. In the long term, cutting reliance on a single supplier and building domestic capability will be essential if Pakistan wants a stable, affordable path to its clean energy goals.