Solar and storage prices are about to rise after a year and a half of record lows, according to new data from Wood Mackenzie. Equipment procurement costs for solar and energy storage will jump around 9% starting in Q4 2025, marking the end of the bargain pricing developers have enjoyed for the last 18 months. That’s because China is changing the rules.
Why solar +storage prices are going up
Wood Mackenzie points to three major drivers behind the coming spike:
- Polysilicon consolidation. China’s polysilicon production exploded between 2022 and 2024, creating a glut and pushing prices to unsustainable lows. But new government guidelines are now forcing producers to slow down, cutting utilization rates to 55-70%. As a result, polysilicon prices surged 48% in September 2025 alone.
- Production cuts across the value chain. Solar module makers are also reducing operating rates, with major producers running at just 55-60% capacity by mid-2025. Outdated PERC cell lines are being phased out, further shrinking available capacity.
- The end of China’s export tax rebate. Starting in Q4 2025, China will scrap its 13% VAT export rebate on solar modules and storage systems. This fiscal change will ripple through global pricing since China supplies over 80% of the world’s solar modules and 90% of lithium iron phosphate (LFP) battery packs.
That policy shift means developers worldwide will face higher costs. In the US, storage and solar projects relying on Chinese equipment will likely see about a 9% cost increase in Q4. Analysts expect inverters to lose their export rebate soon, too, adding more upward pressure.
From price war to market correction
For the past year and a half, Chinese manufacturers have been selling solar modules and storage systems at rock-bottom prices, trying to move oversupply even while posting losses. Modules hit record lows of $0.07-$0.09 per watt in 2024 and early 2025. But with government intervention, that price war is ending.
“This is about to change,” said Yana Hryshko, senior research analyst and head of Global Solar Supply Chain at Wood Mackenzie. “The Chinese government has intervened to stabilize the market, and developers globally will have to adjust their procurement expectations accordingly.”
Wood Mac says the shift represents a “structural correction” toward sustainable margins, not just a temporary market adjustment. “This shift will ultimately benefit the industry’s long-term health,” said Hryshko. Manufacturers will finally have room to reinvest and innovate, but developers will need to revisit budgets and renegotiate supply deals for production scheduled after November 2025.
Bottom line is, ultra-cheap solar and storage gear is on its way out. The next phase of the energy transition will likely come with higher but more sustainable prices.
Read more: H1 2025: China installs more solar than rest of the world combined
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