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The global solar industry faces a massive shake-up. A significant policy shift in China, the world’s leading producer of photovoltaic (PV) equipment, guarantees a new wave of increments in solar costs. Consequently, this decision directly threatens Pakistan’s rapidly expanding solar market.
The End of Export Rebates
China’s Ministry of Finance and State Taxation Administration dropped a bombshell announcement this January. Effectively, they are completely withdrawing value-added tax (VAT) export rebates on photovoltaic products.
This aggressive change begins on April 1, 2026. On this date, export rebates on PV modules will be fully cancelled. Furthermore, rebates on battery products face a gradual phase-out, disappearing entirely by 2027.
Surging Solar Costs & Supply Chain Strain
Industry analysts warn that this move piles pressure on an already stressed global supply chain. Specifically, the removal of the 9% export rebate will likely push module prices up by a similar margin.
According to the Shanghai Metals Market, this policy slashes export profits for a standard 210R photovoltaic module by up to 51 yuan per unit. Manufacturers cannot absorb this loss. Therefore, passing these costs to overseas buyers is unavoidable. A senior analyst described this as a “structural cost shift”, not merely a minor market adjustment.
Adding fuel to the fire, upstream costs are skyrocketing. Prices for key raw materials like polysilicon climbed nearly 10% month-on-month. Simultaneously, silver prices hit record highs.
What This Means for Pakistan
For Pakistan, the timing is critical. The country heavily relies on imported PV modules from China to combat high electricity tariffs and power shortages. Unfortunately, this leaves local project costs fully exposed to global price hikes.
Global analysts note that this shift exceeded expectations. Manufacturers are already renegotiating contracts, signalling price jumps of up to 9% post-April.
Consequently, international buyers are rushing to secure stock before the deadline. Analysts predict a short-term export spike, followed swiftly by higher prices and softer demand. For Pakistani consumers, the window to buy is closing. While solar remains cost-competitive, early procurement is the only way to avoid the looming price surge.
