China's VAT Changes: A Complete Guide for Australian Solar Buyers

Hey SolarInsights readers, it's no secret that Australian solar energy relies heavily on Chinese manufacturing. Recent policy shifts in China regarding Value Added Tax (VAT) export rebates are set to impact the cost of solar panels, batteries, and potentially inverters here in Australia. Understanding these changes is crucial for making informed decisions about your solar investment. This blog post will break down what's happening, why it matters, and how you can navigate these changes. For more in-depth information, check out our Complete Guide.

What's Happening in China?

The Chinese government is phasing out VAT export rebates on solar photovoltaic (PV) products and batteries. This means that Chinese manufacturers will no longer receive tax refunds on these exported goods. This change is being implemented in stages.

• Solar Panels (PV Products): The VAT export rebate was initially reduced from 13% to 9% in December 2024. As of April 1st, 2026, the rebate has been completely eliminated.

• Batteries: The VAT export rebate for batteries is being reduced from 9% to 6% between April and December 2026, and will be completely removed from January 1st, 2027.

Why Does This Affect Australian Solar Buyers?

Australia sources a significant majority of its solar panels and batteries from China. Some reports indicate that over 90% of solar panels installed in Australia are manufactured in China, while Chinese manufacturers account for over 70% of the Australian solar battery market.

Previously, manufacturers may have used these rebates to offer lower prices to foreign buyers, including those in Australia. Now that these rebates are being reduced and eliminated, we can anticipate wholesale price increases in panels and batteries.

How Will This Impact Prices in Australia?

The exact impact on retail prices is difficult to predict, as it depends on various factors such as currency exchange rates, shipping costs, and the margins applied by installers. However, here's a general idea of what to expect:

• Solar Panels: Some analysts estimate that wholesale panel prices could increase by around 9% due to the removal of the VAT rebate. Given that solar panel prices are currently very competitive, even with the increase, they should still remain relatively affordable. For a typical 10kW system consisting of approximately 23 panels, this could translate to an increase of up to a couple of hundred dollars.

• Batteries: The impact on battery prices will be phased. After the April 2026 changes, a battery like a 16kWh model could cost around $200 more. The more significant impact will occur in January 2027 when the remaining 6% VAT rebate is removed. This could add around $600 to the cost of the same battery.

• Inverters: It’s possible that solar inverters, considered part of "photovoltaic products", may also see a price increase after April 2026. If so, this could add a couple of hundred dollars for premium inverter models.

What About Australian Rebates?

It's essential to remember that these Chinese VAT changes are happening in parallel with changes to Australian government rebate programs, such as the Cheaper Home Batteries Program (CHBP). These programs will also be reducing between now and next year. This means that the actual cost of a solar and battery system could increase by a significant amount. As a hypothetical example, the reduction in the CHBP rebate alone in May 2026 could add approximately $1,800 to the cost of a 16kWh battery compared to its cost in December 2025, even before factoring in the impact of the reduced Chinese VAT rebates.

What Should Australian Solar Buyers Do?

1. Don't Panic: While price increases are likely, don't rush into a purchase based on fear. Take your time to research and compare different systems and installers.

2. Get Quotes Now: Obtain quotes from multiple installers to get a better understanding of current pricing and potential future increases. Be sure to ask about price guarantees and the estimated installation timeframe.

3. Consider Installation Timing: Keep in mind that the amount of any government rebates you receive is based on when the system is installed, not when you sign the contract. Plan your installation accordingly to maximize your rebate.

4. Factor in Total Costs: When evaluating quotes, consider not just the upfront price, but also long-term savings, financing options, and potential maintenance costs.

5. Research Brands: Read reviews from other Australian customers to get insights into the performance and reliability of different solar panel and battery brands.

The Bottom Line

China's VAT changes will likely lead to some price increases in solar panels and batteries in Australia. However, by understanding these changes and planning accordingly, you can still make an informed decision and invest in a solar energy system that meets your needs and budget. Don't let the fear of price increases drive you into a hasty purchase. Take your time, do your research, and choose the right system for your home.