Why solar panel and battery prices are expected to increase in Pakistan

A new round of price increases is expected in the global solar market after China announced the withdrawal of tax incentives for photovoltaic (PV) exports, a move likely to affect solar costs in Pakistan.

In January 2026, China’s Ministry of Finance and State Taxation Administration said value-added tax export rebates on photovoltaic products would be withdrawn from April 1, 2026. Under the policy, export rebates on PV modules will be fully abolished, while rebates on battery products will be gradually phased out and eliminated by 2027.

Industry analysts say the decision is expected to raise global module prices, with estimates suggesting that the removal of the 9 per cent export rebate alone could result in a similar increase in prices. Analysts at Shanghai Metals Market said the policy would reduce export profits on standard photovoltaic modules, making price increases for overseas buyers difficult to avoid.

The development has implications for Pakistan, where solar installations have expanded rapidly due to high electricity costs and ongoing power shortages. Pakistan relies heavily on imported PV modules, mainly from China, leaving project costs vulnerable to international price movements.

Additional pressure is coming from rising input costs. Prices of key materials such as polysilicon and silver have increased in recent months, further contributing to cost inflation.

Global analysts say exporters are revising contracts ahead of April, with some manufacturers indicating potential price hikes of up to 9 per cent.