Overseas solar panel buyers are facing price increases as Chinese manufacturers look set to pass on higher costs to customers amid rising silver prices and the impending withdrawal of an export tax rebate.
Trina Solar, one of the world’s top four solar module makers by shipment volume, hiked its average selling prices by 3.5-3.66 per cent, to around 0.85-0.89 yuan per watt, according to a Tuesday note by Citibank. The Shanghai-listed company ships modules – a key solar panel component – to over 180 countries.
Longi Green Energy Technology, which derived nearly 40 per cent of its revenue in the first half from overseas markets, was doubling its prices to 0.06 yuan per watt, mainland Chinese media reported.
Rising silver prices were behind the trend, as the metal accounted for between 5 and 15 per cent of the cost of solar panels, said Lucas Zhang Liutong, director of Hong Kong-based consultancy WaterRock Energy Economics.
Silver prices exceeded US$70 per ounce in late December and have broken multiple records since then. The metal exceeded US$86 an ounce on Tuesday, up 48 per cent from its historical level of around US$58 on December 1.
The surge in silver was largely driven by the spillover of investment demand from gold – which had only risen over 9 per cent since December – amid global geopolitical tensions and bets that the white metal would be as critical as copper in the development of artificial intelligence infrastructure, analysts at Citibank and Julius Baer said.
“Compared with the possibility that firms bear all the rises, the costs [for silver] will likely be largely passed on through via higher panel prices,” said Zhang.
Amid geopolitical conflicts over the past three years, oil and natural gas prices have surged, boosting demand for cheaper alternatives like solar energy and batteries.
China exported 206 gigawatts of photovoltaic modules in the first nine months of 2025, up 10 per cent from a year earlier. In September, the top five markets – the Netherlands, Brazil, the United Arab Emirates, Belgium and France – accounted for 35 per cent of the global total, data from consulting firm InfoLink showed.
The cancellation of export value-added tax (VAT) rebates was also expected to add pressure on solar firms to increase prices.
On January 9, Chinese authorities announced that the 9 per cent rebate for solar products, excluding inverters, would be terminated effective April 1, ending rebates that had been in place since October 2013.
The move aimed to further curb excessive industry competition and reduce overseas concerns about anti-dumping activities from China, Citibank said, citing its conversations with officials at the state economic planner National Development and Reform Commission.
The China Photovoltaic Industry Association (CPIA) highlighted the “vicious competition in overseas markets”, as some exporters used tax rebates from the government to apply discounts for international customers, hurting the margins of domestic players.
Although the policy adjustment was not the only way to end “involution” – fierce competition that drives down prices and undermines sustainable growth – the measure could help stop export prices from falling too quickly, said the industry body.
For the first 10 months of last year, China’s solar exports expanded 6 per cent year on year by volume, but their value declined 13.2 per cent in the same period, said CPIA honorary chairman Wang Bohua.
Nomura expected the termination of VAT rebates to push some Chinese manufacturers to set up more overseas factories.
However, banks are conservative about overseas demand. Citibank forecast that new global solar capacity would decline 10 per cent this year from a year earlier, while Julius Baer analysts pointed to the weak jobs market in the US.
Even if Chinese solar giants could pass on 50 per cent of their additional costs to customers, some players might have to bear higher operating costs, according to Citibank.
Overall, Citibank expected that the consolidation of China’s solar industry would accelerate, marking another challenging year for the sector that had endured price wars and regulatory pressure in recent years. -- SOUTH CHINA MORNING POST
