Solar power is helping to mitigate the effects of fossil fuel price shocks. It saved Europe more than €100 million a day throughout March by reducing gas imports.
If prices remain high because of Iran’s control of the Strait of Hormuz, savings could reach €67.5 billion by the end of the year.
Where does Europe get its solar panels from?
In 2024, the EU imported €14.6 billion worth of green energy products, including €11.1 billion worth of solar panels. The supplier of these panels was China with 98% of all imports.
According to the International Energy Agency, China invested more than €43 billion in new solar capacity, ten times more than Europe. Today, it accounts for more than 80% of the world’s capacity.
However, China’s monopoly in the market has not turned out to be a clear victory for it: fierce competition has forced companies to sell products below cost. The IEA report cited by Euronews says that by the beginning of 2024, its losses have reached 4.3 billion euros.
Against this background, from April 1, 2026, the export VAT refund of 9% on solar products was abolished and the 9% VAT refund on battery products was reduced to 6%. As of January 1, 2027, the VAT refund on batteries will be completely abolished.
Will China’s tax reform lead to higher prices?
The elimination of China’s export VAT refund alone will lead to an increase in module prices of around 10%. The industry refers to individual PV panels as solar modules.
However, the market does not react so quickly, and the price increase will not be felt immediately. Analysts also do not expect the price increase to significantly limit demand for solar generation, given its competitiveness.
They note that the cost of ground-mounted projects (usually large solar power plants) has risen slightly in recent weeks, but the large volume of orders is holding back a significant increase in average prices.
At the same time, prices for small-scale or “distributed” solar installations, which are mounted directly on rooftops or carports, continued their slight decline earlier this week.
Silver has become the Achilles’ heel of the solar industry
Solar panels are made up of glass, polymers and aluminum. As well as silver, the most efficient conductor of electricity and heat. Although silver accounts for less than 5% of a panel’s mass, it can account for up to 30% of the total cost of production.
It is estimated that in 2023 alone, about 4,000 tons of silver went into the production of PV panels. That’s 14% of the world’s consumption of the metal. Researchers warn that by 2030, this share will rise to 20%, which is four times the level of 2014.
So Chinese manufacturers are replacing silver with cheaper copper. This could save the global solar industry around €12.8 billion annually. However, copper prices have also been rising in recent years, albeit not as rapidly as silver.
Silver prices jumped by more than 150% in the first weeks of 2026, making it a major factor in panel costs. These changes will start to reach end consumers this summer.
According to experts, the combination of high prices for raw materials and the abolition of VAT refunds in China may lead to an increase in the price of individual components by 15-20%.
Private consumers will feel this “in the medium term”, while those who want to install PV panels still have “more favorable prices” available.
Despite the uncertainty, experts emphasize: even now, solar panel prices are about 50% lower than in 2023, and solar power remains one of the cheapest sources of electricity in the world.
