Increase in costs for home solar panel installations imminent
In late 2024, China announced a significant policy change that could impact the cost of solar panel installation in the UK. The country's government reduced export tax rebates on solar products from 13% to 9%, marking the end of a long period of declining costs [1].
This measure is part of China's broad supply-side reform, aimed at curtailing overproduction, encouraging industry consolidation, and halting "disorderly price competition" [2][3]. The reduction in rebates reduces the financial incentives for Chinese solar manufacturers to export panels at low prices, contributing to higher module prices [3].
For the UK market, which relies significantly on imported Chinese solar panels, these developments likely mean higher procurement costs for solar installations. While precise UK-specific price impacts are not detailed in the sources, the global nature of the solar supply chain implies a ripple effect leading to increased panel costs [2]. This price pressure could slow solar project deployment or increase costs unless offset by government incentives or alternate supply sources.
Industry analysts from Asia Financial suggest that exporters are likely to pass on the extra costs, which could result in a price increase of £0.0022 to £0.0033 per watt for overseas buyers [4]. If China removes the rebate entirely in early 2025, as some analysts predict, UK solar panel prices could rise even further [5].
Gerard Scheper, CEO of European Solar, warns that the tax policy shift could mark the beginning of price increases [6]. He advises consumers considering solar panel installation to act quickly before these price hikes take effect to save thousands in the long run [7].
It's important to note that a significant portion of solar panels in the UK contain materials sourced from the Xinjiang region, according to Green Economy [8]. This could potentially raise concerns about the ethical implications of the policy change.
China dominates the global solar supply chain, exporting more than £21 billion worth of solar PV products in 2024 [9]. The reduction in China's solar panel rebate will lead to a drop in tax refunds of over £790 million [10].
The document confirming the policy change was issued on 15th November by China's Ministry of Finance and State Taxation Administration [11]. As the deadline for the rebate reduction approaches, it's crucial for UK consumers and businesses to stay informed and consider their options for solar panel installation.
References: 1. [Source 1] 2. [Source 2] 3. [Source 3] 4. [Source 4] 5. [Source 5] 6. [Source 6] 7. [Source 7] 8. [Source 8] 9. [Source 9] 10. [Source 10] 11. [Source 11]
- The reduction in China's solar panel rebate may lead to higher procurement costs for solar installations in the UK, according to industry analysts.
- Gerard Scheper, CEO of European Solar, advises consumers in the UK to consider solar panel installation quickly, before potential price hikes take effect.
- The drop in tax refunds due to China's reduction in solar panel rebates was estimated at over £790 million in 2024.
- If China removes the rebate entirely in early 2025, as some analysts predict, UK solar panel prices could rise even further.
