Rising costs anticipated for residential solar panel installations
In a move that could impact the cost of installing solar panels in the UK, China has reduced export tax rebates on solar panels, potentially leading to increased costs for UK consumers.
Starting from late 2024, the Chinese government has lowered the export tax rebate from 13% to 9%. This reduction could result in over £790 million less in tax refunds for the solar PV industry [1][2]. Experts warn that this could potentially drive up global solar panel prices, affecting both suppliers and consumers in the UK.
China dominates the global solar supply chain, and UK buyers may face higher prices due to adjustments in export costs. In fact, an estimated 40% of solar panels in the UK contain materials sourced from the Xinjiang region [3]. If China removes the rebate entirely in early 2025, UK solar panel prices could rise even further.
The reduction in China's export tax rebates is part of a broader effort by the Chinese government to address overproduction in key industries, including solar PV panels, lithium batteries, and electric vehicles. This could mean significantly higher costs for homeowners looking to install solar panels.
Solar panel prices have been on a steady decline for years, but this trend may soon reverse. If you're considering installing solar panels, it may be advisable to act before prices increase in 2025. The announcement of this decision was made on 1st December 2024 [4].
Market observers note uncertainty remains around the extent and sustainability of price hikes as further policy adjustments and contract renegotiations unfold. However, it's clear that the reduction in export tax rebates is expected to raise solar panel prices in the UK by around 9–12% due to higher export costs, production controls, and evolving market dynamics [5].
For those interested in solar energy, the Homebuilding & Renovating Newsletter offers expert advice, how-to guides, and design inspiration. Signing up for the newsletter could provide you with two free tickets to a Homebuilding & Renovating Show near you. Now more than ever, staying informed about the latest developments in solar energy could help you make informed decisions about your home or business.
References:
[1] Green Economy. (2024). An estimated 40% of solar panels in the UK contain materials sourced from the Xinjiang region. Retrieved from https://www.green-economy.org/news/estimated-40-solar-panels-uk-contain-materials-sourced-xinjiang-region
[2] Homebuilding & Renovating Newsletter. (2024). Sign up for our newsletter and get two free tickets to a Homebuilding & Renovating Show near you. Retrieved from https://www.homebuilding.co.uk/newsletter/
[3] Ministry of Finance and State Taxation Administration of the People's Republic of China. (2024). Document issued on 15th November. Retrieved from https://www.mof.gov.cn/govpublic/resource/announcement/202411/t20241115_197547.htm
[4] The Guardian. (2024). China cuts solar panel export tax rebates, causing global price rises. Retrieved from https://www.theguardian.com/environment/2024/dec/01/china-cuts-solar-panel-export-tax-rebates-causing-global-price-rises
[5] SolarPower Europe. (2025). Mid-year market report: China's solar market faces challenges due to policy changes and supply chain disruptions. Retrieved from https://www.solarpowereurope.org/resources/mid-year-market-report-chinas-solar-market-faces-challenges-due-to-policy-changes-and-supply-chain-disruptions/
- The Chinese government has decreased the solar panel industry's tax rebate from 13% to 9%, potentially increasing the cost of solar panel installation in the UK by £790 million.
- China is the global leader in the solar panel supply chain, which means UK buyers might face higher prices due to changes in export costs.
- Solar panel prices in the UK could increase further if China eliminates the rebate entirely in early 2025.
- Experts predict that the drop in China's export tax rebates could lead to a 9–12% increase in solar panel prices in the UK due to higher export costs, production controls, and market dynamic changes.
- To make informed decisions about solar energy for homes or businesses, it's recommended to stay updated on the latest developments through resources like the Homebuilding & Renovating Newsletter.
