Solar Panel Price Predictions: What to Expect After China's VAT Rebate Change
Heads up, Aussie solar enthusiasts! If you're considering investing in solar panels or batteries, there's some important news coming out of China that could impact your wallet. Changes to China’s export tax rebates are on the horizon, and they're likely to affect the price of solar photovoltaic (PV) products and batteries in Australia.
What's Changing?
Starting April 1st, 2026, the Chinese government plans to eliminate value-added tax (VAT) export rebates for solar PV products entirely. This rebate had already been reduced from 13% to 9% in December 2024. For batteries, the VAT export rebates will be reduced from 9% to 6% between April and December 2026, and then completely removed from January 1st, 2027.
These rebates have essentially functioned as price discounts for international buyers, meaning their removal could lead to higher wholesale prices. Given that the vast majority of solar panels and a significant portion of batteries installed in Australia are manufactured in China, this change will likely ripple through the Australian market. Estimates suggest that over 90% of solar panels installed here are Chinese-made, and Chinese manufacturers account for a substantial portion of the battery market.
How Will This Affect Solar Panel Prices?
If manufacturers pass on the full impact of the VAT rebate changes, we could see wholesale panel prices increase by around 9% from April 1st, 2026.
Let's break that down with an example. Say a typical solar installation business applies a gross margin of 24% on wholesale prices. A 9% increase in wholesale costs could bump the retail price range up slightly. For example, it could add approximately $130 - $152 to the installed price of each panel.
Considering a standard 10kW solar system uses approximately 23 panels, we're talking about a potential price increase of only a couple of hundred dollars extra for the total system.
What About Battery Prices?
The impact on battery prices will be a bit more complex and unfold over a longer period. The initial reduction in April 2026 could lead to a roughly 3% increase. Then, the complete removal of the VAT rebate in January 2027 could add another 6%.
For instance, a battery currently retailing for around $6,720 (including the federal rebate and excluding installation) might increase by around $200 after April 2026, bringing the price to approximately $6,921. However, the bigger price jump will likely occur in January 2027, potentially increasing the price to around $7,324.
Compounding Factors: The Cheaper Home Batteries Program
Adding to the mix, the Cheaper Home Batteries Program (CHBP) is scheduled to reduce rebates multiple times between January 1st, 2026, and January 1st, 2027. The CHBP reduction in May 2026 alone could add around $1,800 to the cost of a battery compared to what it cost in December 2025 – even before factoring in any VAT tax rebate reduction.
Inverter Impact
The effect on solar inverters remains somewhat uncertain. If inverters are considered "photovoltaic products" under the Chinese regulations, their prices could also increase by around 9% after April 1st. This could add another couple of hundred dollars for premium models.
The Big Picture: Total System Cost
For a full 10kW solar system combined with a 16kWh battery system, the combined effect of China's VAT rebate reductions and CHBP reductions means that it could cost up to $2,400 more between May and December 2026 compared to late 2025. The price will climb further in January 2027 when the battery VAT rebate is entirely removed and another CHBP reduction takes effect.
What Should You Do?
While it's tempting to rush into a purchase out of fear of missing out (FOMO), it's crucial to make informed decisions.
- Do Your Research: Understand your energy needs, compare different brands and products, and get multiple quotes from reputable installers.
- Time Your Purchase Wisely: Keep in mind that how much of a federal rebate you’ll receive is based on when the system is installed, not when the sales contract was signed.
- Don't Panic: Panel prices are currently low, and even with these changes, they're expected to remain relatively affordable.
The solar industry is constantly evolving, and these changes are just another part of that evolution. By staying informed and making smart choices, you can still make solar power a worthwhile investment for your home or business.
