Manufacturers will be refunded 50% of the value added tax from 1 October 2013 to 31 December 2015, the state-owned Xinhua news agency has reported.
Chinese firms emerged as key players in the solar power sector in recent years.
But weak demand and trade rows have resulted in overcapacity, leaving leading firms with huge debts.
According to the Xinhua report, the country's top 10 solar panel makers have up to 100bn yuan ($16.3bn; £10bn) in debt.
Earlier this year, China's Suntech Power Holdings, the world's biggest solar panel maker, defaulted on its debt.
That was followed by a default by LDK Solar Company, the world's largest producer of solar wafers.