China Suspends Approval of New Energy Storage Projects Not Yet Under Construction
nashnova research
China has suspended approvals for all battery storage plants not yet under construction, launching a simultaneous review of existing and planned capacity. This means regulators are shifting from encouraging expansion to forcing consolidation — compounded by a new battery excise tax set to take effect in September 2026.
What exactly happened?
Citing industry sources, Cailian Press reports that authorities have frozen approvals for all unstarted battery storage projects and begun reviewing existing and planned capacity.
This means → new projects cannot get the green light in the near term; the industry's expansion spree is on pause.
The review covers both built-out and planned capacity — regulators are not just blocking new supply but sizing up what already exists.
Why hit the brakes now?
China's storage sector expanded rapidly on heavy subsidies with few capacity controls, and overcapacity has become acute.
Some solar-panel makers, fleeing a prolonged glut in module markets, pivoted into battery storage — piling more supply onto an already saturated sector.
In plain terms = EVs, solar, and storage followed the same arc — subsidies inflated capacity, capacity triggered price wars, price wars crushed margins, and most players, including industry leaders, are losing money.
What is the battery excise tax?
The Ministry of Finance, Customs, and Tax Administration jointly announced a consumer tax on batteries starting September 1, 2026.
Lithium-ion, vanadium redox flow, and other conventional batteries: 2% from September 2026, rising to 4% in September 2027. Solar cells: 2% from April 2027, rising to 4% in April 2028.
This means → production costs for conventional batteries will be artificially raised, squeezing already-thin margins further — a tax lever designed to force industry shakeout.
Why are next-gen technologies exempt?
Sodium-ion batteries, solid-state batteries, fuel cells, and advanced solar cells such as perovskite, tandem, and gallium arsenide are exempt from the excise tax through December 2028.
In plain terms = regulators are squeezing legacy capacity while holding the door open for frontier tech — what's being punished is overcapacity, not innovation.
This reflects a dual-track policy design: use taxes and approvals to cap legacy expansion in the short term, while channeling resources toward next-generation technologies over the medium run.
What does this mean for the industry?
The approval freeze and excise tax working in tandem mark a regulatory pivot for China's storage sector: from "flood the field" to "force a diet."
The real impact hinges on two variables: how long the review lasts, and whether follow-up policies — exit mechanisms, M&A incentives — materialize.
This means → new supply will be suppressed in the near term, but existing overcapacity will not vanish overnight — a genuine shakeout requires time and additional policy support.
市场有风险，内容仅供研究参考，不构成投资建议。