A new report from Wood Mackenzie indicates that solar and storage developers will face significant increases in equipment procurement costs starting in the fourth quarter of 2025, marking the end of the low-price era seen over the past 18 months. This shift is attributed to policy adjustments in China and supply-side production cuts.
The analysis points out that three key factors—consolidation in the polysilicon industry, supply-side production cuts, and China’s cancellation of the 13% VAT export rebate—will collectively drive up solar module prices by approximately 9% in Q4 2025, with further increases expected in 2026.
Yana Hryshko, Senior Research Analyst at Wood Mackenzie and Head of Global Solar Supply Chain, stated, “Over the past 18 months, developers have benefited from Chinese manufacturers selling solar modules and storage systems at extremely low prices to reduce excess inventory. But this is about to change. The Chinese government has intervened to stabilize the market, and global developers need to adjust their procurement expectations accordingly.”
The research shows that from 2024 to early 2025, Chinese manufacturers engaged in price competition despite sustaining significant losses, driving solar module prices down to historic lows of $0.07–0.09 per watt. This unsustainable situation has now reached a turning point.
