The Ministry of Finance announced Sunday that solar product vendors will get a 50 percent refund on value-added taxes for self-produced goods, the official Xinhua News Agency reported.
The tax-credit measure enters into force Tuesday.
The government in August offered a 7 cent per kilowatt-hour subsidy for solar power stations in the country.
The United States and European Union have said Chinese manufacturers of solar products are getting an unfair advantage in their respective markets.
EU Trade Commissioner Karel De Gucht announced in July the bloc reached an "amicable solution" in a solar trade dispute with China.
The EU planned to impose duties on Chinese solar panels in response to allegations they were sold on the European market at below market cost. Officials said the Chinese government targeted the European wine industry in response.
Chinese-manufactured solar products account for more than half of the global market.