China’s decision to end value-added tax rebates on solar panel exports and phase out incentives for battery storage equipment could push up the cost of solar installations in Africa, which relies heavily on imported Chinese technology. The changes, expected to take effect on 1 April for solar panels and from next year for batteries, may complicate efforts to expand renewable energy across the continent, though experts say the impact is likely manageable.
“We are likely to see solar panel prices increase in Africa because most of the inputs come from China,” said Wangari Muchiri, an energy analyst focused on Africa’s clean energy sector. “Removing the rebate will add to existing costs, especially when you consider shipping, logistics, and other import fees.” Africa already pays significantly more for solar equipment than other regions due to transport costs, smaller import volumes and tariffs.
The policy change reflects broader shifts after fierce competition among Chinese manufacturers pushed solar module prices to as little as $0.07 per watt in 2025, from $0.25 in 2022. Some Chinese companies built VAT rebates into their export pricing, effectively transferring subsidies to overseas buyers. But Beijing has cut back on those payments as it reins in overcapacity and shifts toward more advanced technologies.
Rather than a sharp price shock, the loss of rebates will likely gradually raise prices, setting a firmer global price floor. “The changes are significant, but not catastrophic,” said John van Zuylen, CEO of the Africa Solar Industry Association. “The entire recent solar boom was built on artificially cheap Chinese pricing. That era is now ending.” Even with modest price increases, solar is expected to remain competitive across much of the continent, as it is the cheapest source of energy in Africa.
Battery storage, critical for providing electricity after sunset, may face a bigger challenge as incentives are phased out through 2027. Higher costs may affect smaller users the most. Basil Abia, co-founder of Nigerian energy research firm Truva Intelligence, noted that “batteries have historically been expensive, and many solar installations in Africa were built without them.” He added that the VAT removal will slow but not reverse Africa’s clean energy transition, urging countries to accelerate local manufacturing.
