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A new wave of price increases is expected to hit the global solar industry following a major policy shift by China, the world’s largest producer of photovoltaic (PV) equipment, with direct implications for Pakistan’s fast-growing solar market.
In January 2026, China’s Ministry of Finance and State Taxation Administration announced the complete withdrawal of value-added tax (VAT) export rebates on photovoltaic products, effective April 1, 2026. Export rebates on PV modules will be fully cancelled, while rebates on battery products will be gradually phased out and eliminated by 2027.
Industry analysts say the move has added fresh pressure to an already strained global supply chain, triggering what they describe as an impending price hike driven by policy changes and rising input costs. Market estimates suggest the removal of the 9pc export rebate alone could push module prices higher by a similar margin.
Analysts at Shanghai Metals Market note that the policy change will reduce export profits for a standard 210R photovoltaic module by up to 51 yuan per unit, making price pass-through to overseas buyers increasingly unavoidable. “This is a structural cost shift rather than a minor adjustment,” a senior photovoltaic analyst said.
For Pakistan, where solar installations have accelerated amid high electricity tariffs and power shortages, the timing is significant. The country relies heavily on imported PV modules, mostly from China, leaving local project costs exposed to global price movements.
Upstream cost pressures are further intensifying the situation. Prices of key raw materials, including polysilicon and silver, have risen sharply in recent months. Market data shows polysilicon prices climbing nearly 10pc month-on-month, while silver has hit record highs, adding to module cost inflation.
Global analysts, including BloombergNEF, note that the scale of China’s policy shift exceeded market expectations, prompting exporters to renegotiate contracts and revise pricing. Several manufacturers have already indicated that module prices could rise by up to 9pc after April.
As a result, international buyers are moving to accelerate procurement ahead of the April deadline, after which shipments will no longer qualify for existing rebate structures. Industry observers expect a short-term spike in exports, followed by higher prices and softer demand.
For Pakistan’s solar sector, analysts say the coming months may be critical. While solar remains cost-competitive compared to conventional power, sustained price increases could slow adoption, particularly among price-sensitive consumers. Early procurement, they note, may help mitigate exposure to the next phase of global solar price adjustments.
