The end of China’s export tax rebates for solar panels and associated equipment could prompt a rush by power developers in African to secure supplies at the previous lower prices.
Across Africa, a lack of reliable access to grid electricity is driving the adoption of mini-grids and off-grid solar applications, especially in rural areas. Solar currently accounts for only 3% of electricity generation on the continent, but solar capacity is expanding rapidly, and the end of the 9% value-added tax rebate on Chinese exports of photovoltaic modules, cells and inverters as of April 1 could hasten adoption across Africa.
“There’s a big acceleration of people trying to buy panels at the current reduced price with the rebate, which is why you’re seeing many projects rushing to start construction so they can procure panels at a lower cost,” Gerrit Jan Cronselaar, engineering project manager at GameChange Solar, a U.S.-based solar energy company, said at a March webinar organized by the Africa Solar Industry Association (AFSIA), ahead of the end of the rebate.
“Over the course of 2026, we are likely to see a wave of projects coming online as a result of this early push.”
China is the world’s dominant producer and exporter of solar panels, and African countries depend heavily on the country for solar components. China is also phasing out export tax rebates for batteries, reducing them from 9% to 6% this month. They will be fully eliminated by January 2027. Storage systems including batteries ensure a more reliable supply of solar power so electricity is available even after sunset or on cloudy days.
“We don’t expect there to be a massive price spike,” Cronselaar said. “We expect there to be a step-by-step increase in panel prices that is not as catastrophic as some people might think, certainly not for utility-scale projects.”
Ha added that the segments most affected by the end of the rebate will be smaller commercial and industrial users, “as well as the off-grid and mini-grid sectors, where price sensitivity is much higher.”
Another factor that could boost demand for solar is the U.S.-Israeli war on Iran, which has throttled oil and gas exports from the Persian Gulf and driven up global energy prices. Facing an oil shock, some experts say African countries might view solar as a more attractive alternative despite the increased upfront costs.
“The VAT removal will slow, but not reverse Africa’s clean energy transition,” Basil Abia, co-founder of Nigerian energy research company Truva Intelligence told the Associated Press.
The increased cost of solar installations is bringing renewed scrutiny to global dependence on China for critical components and has spurred calls for other countries to increase their domestic manufacturing capacity.
“Countries that use this moment to accelerate local manufacturing will emerge stronger. Those that do not will remain exposed to Beijing’s next industrial policy adjustment,” Abia said.
Banner Image: A solar installation in Mali. Image ©Curt Carnemark/World Bank via Flickr (CC BY-NC-ND 2.0).
This story first appeared on Mongabay
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