Africa solar market braces for higher costs as China cuts export rebates

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China’s decision to end value-added tax rebates on solar panel exports and to phase out incentives for making battery storage equipment is expected to push up the cost of solar installations across Africa, a region that relies heavily on imported Chinese technology, according to an AP report from Nairobi, Kenya. The changes are scheduled to take effect April 1 for solar panels and beginning next year for batteries.

Wangari Muchiri, an energy analyst focused on Africa’s clean energy sector, said the rebate removal would raise panel prices because “most of the inputs come from China.” She added that eliminating the rebate would add to existing costs, including shipping, logistics, and other import fees, which already weigh heavily on Africa’s solar equipment purchases.

The report said Africa often pays more for solar hardware than other regions, citing transport costs, smaller import volumes and tariffs. It also said China’s broader policy shift follows fierce competition among Chinese manufacturers that drove global solar module prices down sharply, leaving some companies with heavy losses.

John van Zuylen, CEO of the Africa Solar Industry Association, described the expected pricing impact as significant but limited. “We are likely to see solar panel prices increase in Africa because most of the inputs come from China,” Muchiri said, while van Zuylen added, “The changes are significant, but not catastrophic.” He said exporters typically either absorb the cost, raise prices, or reduce discounting, and that African countries would likely feel the shift as a gradual upward movement rather than a single dramatic spike.

Van Zuylen also said the recent solar boom was supported by artificially cheap Chinese pricing and that “That era is now ending.” Sonia Dunlop, CEO of the Global Solar Council, said even modest increases could still affect project timelines, adding that changes could increase project costs slightly and “might delay the project construction pipeline” due to supply chain shortages and contractual updates, including stockpiling and congestion in shipments for countries heavily reliant on Chinese imports.

For battery storage—an element needed to supply power after sunset—the report said the policy change may be a bigger challenge than for panels. It said incentives are expected to be phased out through 2027, and that higher costs could affect smaller users the most, while also noting that many solar installations in Africa have historically been built without batteries.

Basil Abia, co-founder of the Nigerian energy research firm Truva Intelligence, said batteries have historically been expensive and that only recently have more systems combined solar with battery storage. Abia also argued that solar modules remain relatively affordable: he said module prices fell from around $0.25 per watt in prior years to as low as $0.07 per watt through 2024 and early 2025, and he said demand is expected to keep growing as storage improves reliability.

Abia told the reporter that the VAT removal would slow, but not reverse, Africa’s clean-energy transition. He said countries that accelerate local manufacturing will be positioned to withstand future shifts in Chinese industrial policy, while those that do not will remain exposed to the next adjustment.