Effective April 1, 2026, China has fully canceled the 9% value-added tax (VAT) export rebate for 249 solar products, including wafers, cells, modules, and inverters. This landmark policy ends years of fiscal support for the world's largest solar exporter, directly adding $0.008–$0.01 per watt (¥0.06–0.07) to production costs. The move follows a 2024 reduction from 13% to 9%, signaling a strategic shift from state subsidies to market-driven competition.
The tax change eliminates a key pricing buffer for Chinese manufacturers. Many exporters previously passed rebate savings to overseas buyers, fueling ultra-low global prices and "price wars". With the rebate gone, firms can no longer absorb costs via state support. Analysts warn the policy will immediately tighten margins, especially for small and medium-sized enterprises (SMEs) lacking scale or overseas production bases.
Silver Price Spike Redefines PV Cost Structure
A historic surge in silver prices has replaced silicon as the biggest cost driver for solar modules. Since early 2024, silver has risen over 270%, pushing its share of total module costs to 15–29%-and exceeding 30% for high-efficiency N-type panels. Each watt of N-type module now uses ~15–20mg of silver, making the metal a critical vulnerability.
This shift has shattered the industry's traditional cost model. For years, silicon dominated expenses, but oversupply stabilized polysilicon at ~$4,830/ton in March 2026. Meanwhile, silver's rally has added $0.014–$0.028 per watt to costs. Manufacturers are scrambling to adopt low-silver and silver-free technologies, but mass commercialization remains 1–2 years away.
Market Impact: Price Rises Reshape Global Solar Dynamics
The dual pressures have triggered the sharpest solar price rebound in a decade. By late March 2026, module prices were 15–20% above 2025 lows, with premium products nearing $0.16/Wp. European buyers now face quotes above €0.10/Wp for the first time since early 2025, while U.S. and Asian markets see similar hikes.
Demand patterns are shifting. Price-sensitive regions like Southeast Asia and Latin America hesitate to accept increases, risking order delays. By contrast, Europe and North America-prioritizing energy security-show greater flexibility. Many Western buyers locked in orders in Q1 2026 to pre-empt April price rises, creating a temporary order surge.
The market is entering a "value competition" phase. Low-cost, low-efficiency products will lose share as buyers prioritize yield, reliability, and bankability. Leading Chinese firms are better positioned to absorb costs via overseas factories and technological edges. For the global market, the era of ultra-cheap solar is over-but the transition should support healthier, more sustainable growth for the industry.