A major reason behind the expected increase in solar panel prices has been revealed, following a significant policy shift by China. This change is likely to create a new wave of price hikes in the global solar industry, directly affecting Pakistan’s rapidly growing solar market.
China is the world’s largest producer of photovoltaic (PV) equipment. In January 2026, China’s Ministry of Finance and State Taxation Administration announced that export VAT rebates on photovoltaic products will be completely abolished from April 1, 2026.
Under this decision, export rebates on PV modules will be fully removed, while incentives on battery products will be gradually reduced and completely phased out by 2027.
Global Supply Chain Under Pressure
Industry experts say this move has added further pressure to an already stressed global supply chain, increasing the risk of higher prices. Analysts believe that the removal of the 9% export rebate alone could raise solar module prices by a similar percentage.
According to analysts at the Shanghai Metals Market, this policy change may reduce export profits on a standard 210R photovoltaic module by up to 51 yuan per unit. As a result, manufacturers are likely to transfer this extra cost to overseas buyers.
A senior solar analyst stated, “This is not a minor adjustment, but a fundamental and structural change in production costs.”
Impact on Pakistan’s Solar Market
This development is especially important for Pakistan, where solar energy installations have increased rapidly due to high electricity prices and frequent load-shedding.
Pakistan depends heavily on imported solar panels, mostly from China. Therefore, any change in global prices directly affects the cost of local solar projects.
With rising international prices, solar systems in Pakistan are expected to become more expensive, which may slow down adoption, especially among price-sensitive consumers.
Rising Raw Material Prices
The situation is further complicated by increasing raw material costs. In recent months, prices of key materials such as polysilicon and silver have risen sharply.
Market data shows that polysilicon prices have increased by around 10% month-on-month, while silver prices have reached record highs. These factors are adding more pressure to manufacturing costs.
Global Market Response
Global analysts, including BloombergNEF, say that China’s policy change is larger than market expectations. As a result, exporters are revising contracts and adjusting prices.
Several manufacturers have already indicated that solar module prices could increase by up to 9% after April 2026.
To avoid higher costs, many international buyers are speeding up purchases before the April deadline. Shipments sent after this date will not qualify for current rebates.
Experts believe this may lead to a short-term rise in exports, followed by higher prices and weaker demand.
Outlook for Pakistan
Experts say the coming months will be crucial for Pakistan’s solar sector. Although solar energy remains cheaper than conventional electricity, continuous price increases could reduce its attractiveness for households and small businesses.
Consumers planning to install solar systems are advised to monitor market trends and consider early purchases to avoid future price hikes.
