China’s Tax Reform May Raise Solar Panel Prices

Jannik Schall of 1KOMMA5° reports that China’s recent tax reform and material costs threaten to increase solar panel prices. In the last decade, solar photovoltaic panels have fallen roughly 90% in price, becoming one of the cheapest electricity sources globally. However, changes to China’s value-added tax rebates—eliminating a nine percent rebate on solar products—may raise module prices by around 10 percent.

The European Union imported €14.6 billion in green energy products in 2024, with 98 percent coming from China. Chinese manufacturers dominate the solar panel market, accounting for over 80 percent of global manufacturing stages. Though Chinese companies have experienced net losses since the beginning of 2024, the country invested over $50 billion in PV supply capacity since 2011.

Rising silver prices, a key component in solar cells, further complicate the situation. While manufacturers explore cheaper alternatives like copper, the cost of copper is also increasing.

Analysts at InfoLink Consulting note that prices for ground-mounted projects have edged up, but high order volumes currently limit larger increases. The work to balance costs and maintain renewable energy access continues.