Wood Mackenzie expects solar and storage costs to increase in Q4 2025 and through 2026
Polysilicon consolidation and production cuts lifted its prices by 48% in September 2025
Production cuts for modules among leading manufacturers have lowered operating rates to 55–60%
China’s 13% VAT rebate removal on exports will raise global solar module and storage prices
Energy data and analytics firm Wood Mackenzie believes that solar PV module prices will climb by about 9% in Q4 2025. The rise is driven by polysilicon consolidation, supply cuts, and the removal of China’s 13% VAT export rebate, with further increases expected in 2026, according to the analysts.
Oversupply in the global PV markets and heightened price competition among Chinese manufacturers pulled down module prices to historic lows of $0.07/W to $0.09/W during 2024 and early 2025. The situation pressed the Chinese government to intervene (see China Steps Up Efforts To Curb Price Wars In Solar Industry).
“The Chinese government has intervened to stabilize the market, and developers globally will have to adjust their procurement expectations accordingly,” said Wood Mackenzie’s Senior Research Analyst and Head of Global Solar Supply Chain, Yana Hryshko.
Consolidation in the polysilicon sector is the 1st key driver, according to Hryshko, a segment where production volumes between 2022 and 2024 grew to massive volumes, leading to competitive prices. New Chinese government rules forced factories to cut output, with leading producers now running at only 55%–70% capacity. As a result, polysilicon prices jumped up by a ‘dramatic’ 48% in September 2025 alone.
With polysilicon producers leading with production cuts, the same trend has spread across the solar value chain. Module operating rates also dropped to 55% to 60% by mid-2025 among leading manufacturers. Obsolete PERC production lines have been phased out, further reducing available capacity.
China’s decision to end the 13% VAT rebate on solar modules and storage exports from Q4 2025 will be the 3rd decisive factor. Since China supplies over 80% of solar modules and 90% of battery packs worldwide, the end of the rebate will raise global benchmark prices, explains Wood Mackenzie.
“Module manufacturers have already warned international customers to expect approximately 9% price increases in Q4 as a result of the VAT rebate cancellation,” Hryshko noted. “With no possibility of alternative supply in the short term, developers will have little choice but to absorb these higher costs.”
For the US market, this will increase the cost of storage projects that use Chinese equipment. VAT rebate for inverters is also set to be cancelled, according to Hryshko.
For existing supply agreements that were finalized earlier this year, this will mean renegotiation for production scheduled after 2025.
Yet, Hryshko sees the increase in module prices as a positive for the industry’s long-term health, and explains, “For manufacturers, it represents a welcome opportunity to reinvest and innovate. For developers globally, it means adjusting procurement expectations. And for policymakers, it's a timely reminder of the risks inherent in concentrated supply chains.”
TaiyangNews covers prices for the Chinese solar market across the PV supply chain on a weekly basis with data collected by Chinese market research firm Gessey PV Consulting (see TaiyangNews PV Price Index – 2025 - CW39).