🌞 Solar Panel Prices Are Rising: What’s Driving the Increase & What It Means for India and the World – EQ
Solar energy has been the global poster child for low-cost, scalable renewable power — but 2025–2026 marks a turning point: solar panel and equipment prices are no longer declining as they have for years. In fact, recent industry data shows prices are heading upward — and China’s policy shifts are at the center of this change.
🔍 Why Solar Prices Are Rising Now — A Comprehensive Look
For more than a decade, the cost of solar photovoltaic (PV) modules steadily dropped as manufacturers ramped up production and competition increased. This phenomenon — often described by Swanson’s Law, wherein PV costs fall ~20% for each doubling of shipments — helped solar become cheaper than fossil fuels in many markets.
However, the era of continuously falling prices is ending, and several key factors explain why:
1. Policy Shifts by the Chinese Government
China dominates the global solar supply chain, supplying over 80% of solar modules and a vast majority of key components
Recent policy changes — including the removal of export tax rebates and adjustments in VAT benefits — have lifted prices on solar modules and storage equipment globally. These changes are expected to increase equipment procurement costs by around 9% in late 2025 and into 2026.
2. Production Cuts & Supply Side Adjustments
Major Chinese manufacturers have reduced output and reined in aggressive price competition. Polysilicon (the raw material for solar cells) prices have consolidated, which in turn increases costs down the supply chain — from wafers to finished panels.
3. Rising Material Costs
Recent tracking shows Chinese PV wafers, cells, and modules have seen year-to-date price increases, with polysilicon alone surging significantly.
4. Market Corrections After a Price Slump
Prices hit record lows in 2024–2025 due to oversupply and aggressive discounting by manufacturers trying to sustain volumes and market share. Now, the market is correcting toward more sustainable pricing.
📈 Solar Price Trends: Key Data Points
| Trend | Impact |
| Projected ~9% cost increase in Q4 2025 globally | Higher procurement costs for developers and buyers worldwide |
| Rising PV module quotes in China | Price increases throughout the solar value chain |
| Ending of export VAT rebates | Reduced cost incentives for overseas buyers |
| Supply stabilization after industry shakeout | Less downward pricing pressure |
🌍 Global Impact: From the US to India
📌 United States & Western Markets
Tariffs and trade policies targeting solar imports — especially from China and Southeast Asia — add another layer of cost inflation. For instance, the US has recently imposed high tariffs on imported solar products, which may raise module costs by $0.10–$0.15 per watt and complicate project financing.
📌 India’s Solar Sector at a Crossroads
India is rapidly expanding its solar installations and has ambitious targets for renewable capacity growth.
However, higher import costs from China threaten to increase the cost of projects — especially where Indian manufacturing hasn’t yet fully matured or scaled. Imported modules from China remain price-competitive, but rising Chinese prices could shift sourcing strategies and demand greater local manufacturing.
Indian solar imports from China rose sharply in recent years, highlighting the country’s dependence on Chinese cells and wafers.
📊 What This Means for Solar Projects
✔ Higher Upfront Costs
Developers and households could face higher installation costs, especially for utility-scale and rooftop projects heavily reliant on imported panels.
✔ Delays in Project Development
Procurement delays and budget pressures may slow down solar deployment in some regions unless supply chains diversify.
✔ Boost for Local Manufacturing
This price shift may provide a catalyst for domestic solar manufacturing in countries like India, making “Make in India” initiatives more economically viable.
🌟 Opportunities Amid Challenges
Despite rising prices, solar remains a cost-effective solution compared to conventional energy in most parts of the world. And long-term demand for renewable energy continues to grow. Multiple forecasts predict that solar capacity will more than double by 2030, even with supply chain headwinds.
▶ Key Strategic Takeaways
- Invest in domestic manufacturing to reduce dependency on imports.
- Diversify supply chains across Southeast Asia, India, and other regions.
- Lock in long-term contracts early to hedge against future price hikes.
- Explore hybrid financing models to manage upfront cost increases.
🧠 Summary: Why Solar Prices Are Rising
📍 China’s policy and industry restructuring
📍 Removal of export tax incentives
📍 Increased raw material costs
📍 Supply stabilization after price wars
📍 Tariffs and trade measures in Western markets
➡ Even with these changes, solar remains a vital and cost-competitive clean energy choice, and rising prices may accelerate global diversification and innovation in production.
