A perfect storm of policy, costs, and global market reactions
“The 22MW module order must be scheduled immediately.”
This short message, posted by a production manager at a leading Chinese PV module manufacturer, perfectly captures what is happening in the global solar industry right now.
As we enter early 2026, photovoltaic prices are rising rapidly — and not for a single reason. What we are seeing is a rare convergence of policy change, raw material inflation, and global demand distortion, creating what many insiders are calling an extreme stress test for the entire PV value chain.
For overseas buyers, the most noticeable signal is simple:
module quotations are changing almost daily.
1️⃣ The Policy Trigger: Export VAT Rebates Are Ending
On January 8, 2026, China’s Ministry of Finance and State Taxation Administration announced that export VAT rebates for PV products will be cancelled starting April 1, 2026.
For years, Chinese PV exports benefited from a 9% VAT rebate, helping manufacturers compete aggressively in global markets. Its removal is not a marginal adjustment — it fundamentally reshapes export economics.
The impact is immediate and binary:
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Ship before April 1 → rebate applies
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Ship after April 1 → costs rise sharply
For an industry already operating on thin margins, this change forces a rapid repricing of risk. As one PV executive put it:
“Once the rebate is gone, the cost increase has nowhere to go except into the product price.”
This single policy move has triggered a global race against time.
2️⃣ Raw Material Costs Are Rising at the Same Time
Policy pressure alone would be manageable. The real problem is timing.
At the same moment export incentives are disappearing, upstream costs are climbing across the board.
According to industry data from InfoLink:
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Leading solar cell prices have risen to above RMB 0.40/W
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Some manufacturers have already paused deliveries
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In certain cases, cell prices jumped ~30% within one month
Beyond cells, key materials are also under pressure:
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Aluminum & copper prices continue to rise
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Silver, critical for PV silver paste, has become increasingly expensive
This is now influencing technology choices.
Modules with higher silver consumption — such as TOPCon — are becoming harder to manufacture profitably, while heterojunction (HJT) technology, with lower silver usage, is gaining relative cost advantages.
In other words, price pressure is no longer just financial — it is reshaping technology strategy.
3️⃣ The “Off-Season” That Never Happened
Traditionally, Q1 is the slow season for the PV industry — a time for maintenance, inventory digestion, and reduced output.
Not in 2026.
To avoid post-April cost increases, overseas buyers are pulling orders forward, forcing factories to run at high utilization during what should have been downtime.
Some manufacturers are now preparing for Chinese New Year production, something almost unthinkable just a year ago.
However, the benefits are unevenly distributed:
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Companies with large existing inventories (produced with lower-cost materials) are clear winners
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Companies with low inventory face a difficult decision:
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buy high-cost cells and rush production
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or abandon the export window altogether
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This divergence is accelerating industry polarization.
4️⃣ Overseas Markets Are Already Feeling the Impact
The price increase is no longer theoretical — it is being transmitted directly to end markets.
In Australia, one of China’s most important PV export destinations, industry analysis shows:
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Budget 440W Chinese modules may rise from AUD 120–140
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to AUD 130–152 per unit after the policy change
For highly price-sensitive markets, the consequences could be more severe.
Some industry leaders warn that certain overseas markets may effectively disappear in 2026, especially regions dependent on:
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ultra-low IRRs
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competitive auction pricing
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heavily leveraged financing models
Southern Europe is frequently mentioned. Under higher module costs, many projects simply fail basic economic viability tests.
Cheap modules were not just a benefit — they were the foundation of the business model.
5️⃣ How Tier-1 Manufacturers Are Responding
Leading PV manufacturers are not standing still.
The most important differentiator right now is global manufacturing footprint. Companies with capacity in Vietnam, the U.S., or other overseas locations are far better positioned to hedge against policy shocks.
Some Tier-1 players have also redesigned contracts, adding:
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price adjustment clauses
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policy risk-sharing mechanisms
At the same time, the industry is showing rare signs of discipline. Major module manufacturers have collectively raised prices by RMB 0.02–0.04/W, signaling an effort to move away from the long-running cycle of overcapacity and destructive price wars.
This may be one of the clearest signals yet that the “sell-more-at-any-price” era is ending.
6️⃣ What This Really Means for the PV Industry
Walk through PV industrial parks in China today and you will notice something unusual:
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factories still fully lit late at night
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trucks lining up for export shipments
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production lines running hard before the holiday season
This is not panic — it is structural transition.
The cancellation of export VAT rebates is not just a cost increase. It is a filter:
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filtering out weak balance sheets
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filtering out unsustainable pricing models
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filtering out low-value competition
As one industry observer summarized:
“This policy will push the PV industry toward higher value, better technology, and faster consolidation.”
For global buyers, the message is clear:
PV prices are resetting — and the old assumptions no longer apply.
The solar industry is still growing. But the rules of competition are changing.
And 2026 may be remembered as the year when cheap solar finally gave way to sustainable solar economics.
Post time: Jan-16-2026