A rough overview of the policy impact. The direct impact of the cancellation of tax rebates on the photovoltaic industry is estimated to be between 15 billion and 20 billion yuan. It’s important to note that this industry already operates with thin profit margins, so this is essentially adding insult to injury.

Last year, the silver price increase drained approximately 70 billion yuan from the industry. Now, with the tax rebate gone, another 15 billion yuan is being taken out. Under these double blows, the industry simply cannot sustain all participants. Large-scale enterprise淘汰 (elimination) is already inevitable.

Let’s analyze how the subsequent development might unfold. Without export tax rebates, the prices of exported products will need to increase by about 8%. Who will bear this 8%? Foreign buyers and domestic manufacturers will have to compete. The party with more bargaining power will bear less of the cost. But in the long run, the result will only be one—decline in foreign orders.

What about domestic module manufacturers? They will fight each other fiercely in the domestic market. The problem is, currently, producing one ton of modules results in a loss of one ton, and every product is losing money. The most rational choice is to simply halt production.

With reduced demand for modules, the demand for polysilicon will naturally decrease as well. Timing is critical: before the policy takes effect on April 1, module manufacturers will desperately export. Raw materials need to be prepared by mid-March. Therefore, from now until around the 15th, polysilicon will experience a short-term surge in demand. After the 15th, demand will plummet dramatically.

This industry expanded wildly in recent years, wasting a lot of capacity. Now, someone has to pay for this inefficiency.