Solar panel prices to increase from April 2026 after new policy shift

2026-01-29 - 08:21

ISLAMABAD – A major policy shift by China, the world’s largest producer of photovoltaic (PV) equipment, is expected to trigger a new wave of price increases in the global solar industry, which will directly impact rates of solar panels in Pakistan, which is emerging as a rapidly growing solar market. China’s Ministry of Finance and the State Taxation Administration has announced the withdrawal of export VAT exemptions on photovoltaic products, effective from April 1, 2026. Under this decision, the export rebate on PV modules will be entirely removed, while the rebates on battery products will be gradually reduced and phased out by 2027. Reports citing industry experts suggested that this move will place additional pressure on an already strained global supply chain, resulting in a possible rise in prices. Analysts predict that the removal of just a 9% export rebate could lead to a proportional increase in the prices of solar modules. This policy change, if implemented, could reduce export profits by up to 51 yuan per unit on a standard 210R photovoltaic module, making it inevitable for the producers to shift the burden on overseas buyers to. This situation is particularly significant for Pakistan, where the rapid growth of solar energy installations has been driven by high electricity rates and frequent power outages. Pakistan heavily relies on solar module imports, most of which come from China, meaning local project costs are directly influenced by global price fluctuations. Compounding the situation are rising raw material prices. In recent months, prices of key materials like polysilicon and silver have seen significant increases. According to market data, polysilicon prices have risen by nearly 10% month-on-month, while silver prices have reached record highs, further pushing up the cost of solar modules. Current Solar Panel Prices in Pakistan Earlier this month, solar panel prices in Lahore and other cities of the country has recorded a whooping jump ahead of summer season. Reports said the per-watt rate of solar panels has increased by Rs10, raising the price from Rs30 to Rs40 per watt. This latest hike has significantly impacted the total expense of complete solar setups, with the cost of a full system going up by as much as Rs200,000. Solar Panel System Latest Prices Under the revised rates, a 5-kilowatt on-grid solar system is now priced at Rs650,000, while a 7-kilowatt system costs Rs750,000. A 10-kilowatt setup is available for Rs1.1 million, a 12-kilowatt system for Rs1.25 million, and a 15-kilowatt installation for Rs1.5 million.