After two years of record-low prices for PV modules and battery systems, analysts warn that the price reduction cycle is coming to an end. China, the world’s leading producer of solar and storage technologies, is introducing changes that are expected to gradually increase prices from the end of 2025 onwards.
Three main factors affecting the market
1. Reduction of China’s export VAT rebate
The Chinese government is gradually phasing out the
13% export VAT rebate for certain photovoltaic and battery products. This incentive has allowed products to be cheaper on foreign markets than they would otherwise be. With the rebate reduced or removed, export prices are expected to rise, leading to higher procurement costs in Europe.
2. Consolidation and reduction of excess production capacity
After a period of aggressive capacity expansion, many Chinese manufacturers have begun closing less efficient factories and reducing overall production. As supply decreases, component and raw material prices stabilize, marking the
end of the extremely low sales prices that dominated in 2023 and 2024.
3. Changes in raw material and cell prices
After a significant drop in lithium and LFP cell prices in previous years, the raw material market is now readjusting. Some mines are closing, and production is adapting, which increases input costs for battery manufacturers. As a result, battery pack prices are expected to gradually rise from Q4 2025.
What does this mean for the European market?
According to analyst firm
Wood Mackenzie, the total cost of purchasing solar and storage equipment in Q4 2025 is expected to increase
by approximately 9%. This is a structural change, not just a short-term fluctuation.
As China accounts for more than 80% of global PV module production and nearly 90% of LFP battery systems, changes in Chinese policy and production will affect the entire industry.
Due to changes in export policy, production consolidation, and raw material market dynamics, the era of extremely low prices is coming to an end. Prices are expected to gradually normalize, requiring European installers, project developers, and distributors to adjust procurement planning and project optimization accordingly.
Recommendations for installers and project developers
- Plan your equipment purchases for projects in 2026 well in advance, as temporary fluctuations can affect inventory availability.
- Don't make your decision based on price alone – proven brands and stable warranty support are a safer choice in the long run.
- Use more efficient modules or optimized systems to compensate for any increase in input costs.
- Be prepared for gradual price increases and potential changes in supplier contracts.
At Energetik, we are ready for the upcoming changes with a well-stocked warehouse, so you can still purchase at original and competitive prices.
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Energetik team