China has confirmed that it will eliminate value-added tax (VAT) rebates on exports of photovoltaic products from 1 April 2026, a move set to mark a turning point for global solar prices. The fiscal incentive, which had already been reduced in 2024 from 13% to 9% for wafers, cells and modules, will be withdrawn entirely.
This decision introduces a new structural cost for all solar products exported from China, consolidating a shift in market dynamics after years of artificially low prices.
Under this new scenario, industry experts are projecting a significant increase in solar panel prices. Rafael Jiménez, Commercial and Business Development Director at VIRA Energy, estimates that “panel prices will rise between 10% and 15% from April”, representing a meaningful correction compared with 2025 levels.
For Jiménez, this adjustment does not signal a crisis but rather a return to normality. “We are going back to real cost logic after a year of artificial pricing in 2025,” he said.
Energy consultant Alejandro Diego Rossel also anticipates upward pressure on prices, although more moderate. In his view, “the era of artificially cheap modules is definitively coming to an end” with the removal of the tax incentive. While he does not expect a mechanical increase equivalent to the eliminated rebate, he believes the measure will lay the foundations for a new market equilibrium.
Roberto Cavero García, another energy consultant, avoids putting a precise figure on the increase, but notes that the order of magnitude is broadly aligned with the 9% incentive that is being removed. In his assessment, prices are likely to trend upwards in the short to medium term, although the final outcome will depend on competitive conditions.
“Over the next six to twelve months, the most likely scenario is a price uptick driven by expectations and advance purchases ahead of April, followed by a step change in the export cost from China,” Cavero García told Energía Estratégica. The final magnitude, he added, will depend on how much manufacturers absorb and how much the market passes on.
In the medium term, “if overcapacity persists, competitive pressure will remain; if consolidation accelerates and artificial discounts are reduced, prices will tend to normalise,” he said.
Against this backdrop, all experts agree that a global wave of advance purchasing (pre-buying) is inevitable. “It will definitely happen, especially among installers with projects already contracted at 2025 prices,” Jiménez said. This behaviour will allow financially stronger developers to secure inventory at pre-adjustment prices, while others will be forced to renegotiate margins or absorb higher costs.
Cavero points out that clear-cut-off dates, such as 1 April, systematically trigger this type of anticipatory behaviour. “Developers, EPC contractors and distributors are trying to lock in prices and secure availability before conditions change,” he said. These advance purchases are expected to temporarily support FOB prices and lead to more expensive restocking later on.
In terms of geographical impact, Spain is expected to be one of the most affected markets, according to Jiménez. “Here we operate with much tighter margins than in the rest of Europe. In Spain, a 10% rise can be the difference between a project being viable or not,” he explained.
While financing conditions, grid access and permitting will continue to weigh more heavily than module costs, the price increase will be critical for projects with tight power purchase agreements (PPAs) or merchant exposure.
Regarding supply chain effects, the fiscal adjustment could translate into downward pressure across the entire industrial ecosystem. “In this sector, when panel manufacturers sneeze, the whole supply chain catches a cold,” Jiménez warned.
Suppliers of solar glass, silicon, aluminium frames and other inputs may face pressure from manufacturers seeking to protect margins under the new tax environment.
“This measure will accelerate a ‘clean-up’ of manufacturers operating at the edge of their cost structures,” Jiménez predicted. Cavero expects higher short-term volatility, driven by logistical strain from pre-buying and a possible drop in volumes once the policy comes into force.
On the possibility of diversifying supply away from China, the consensus is clear: it will not happen overnight. “In the short term, it is virtually impossible to shift production away from China and remain competitive,” Jiménez said.
Rossel, however, sees an opportunity for non-Chinese suppliers in projects where origin, traceability and regulatory compliance matter as much as price. This could play out in public tenders, ESG-driven funds and contracts with stricter regulatory requirements.
Looking ahead, Rossel believes the removal of the tax incentive will help stabilise the market. “Less extreme dumping and more rational pricing support margin stability and planning,” he said, while warning that this will depend on the absence of a new price war.
The consensus among analysts is clear: 2026 will mark the end of one era and the beginning of a more realistic phase for the global solar industry.
