NAIROBI, Kenya (AP) \u2014 China\u2019s decision to end value-added tax rebates on solar panel exports and phase out incentives for making battery storage equipment could push up the cost of solar installations in Africa, which relies heavily on imported Chinese technology.<\/p>\n
The changes, expected to take effect April 1 for solar panels and beginning next year for batteries, may complicate efforts to expand renewable energy to close vast electricity gaps across Africa, though experts say the impact likely will be manageable. <\/p>\n
\u201cWe are likely to see solar panel prices increase in Africa because most of the inputs come from China,\u201d said Wangari Muchiri, an energy analyst focused on Africa\u2019s clean energy sector. \u201cRemoving the rebate will add to existing costs, especially when you consider shipping, logistics, and other import fees.\u201d<\/p>\n
Africa already pays significantly more for solar equipment than other regions because of transport costs, smaller import volumes and tariffs. <\/p>\n
China\u2019s 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. That helped drive global adoption of solar energy, but left many companies with heavy losses.<\/p>\n
Some Chinese companies built VAT rebates into their export pricing, effectively transferring those subsidies to their overseas buyers. But Beijing has cut back on those payments as it reins in overcapacity and shifts toward more advanced technologies.<\/p>\n
Rather than a sharp price shock, the loss of such rebates will likely gradually raise prices, setting a firmer global price floor. <\/p>\n
\u201cThe changes are significant, but not catastrophic,\u201d said John van Zuylen, CEO of the Africa Solar Industry Association. <\/p>\n
\u201cThe entire recent solar boom was built on artificially cheap Chinese pricing,\u201d van Zuylen said. \u201cThat era is now ending.\u201d<\/p>\n
\u201cWhen a structural rebate is removed, exporters typically either absorb the cost, raise prices, or reduce discounting,\u201d van Zuylen said. \u201cAfrican countries will likely feel this as a gradual upward shift in pricing rather than a single dramatic spike.\u201d<\/p>\n
Even with modest price increases, solar is expected to remain competitive across much of the continent since it\u2019s the cheapest source of energy in Africa, Muchiri said. <\/p>\n
\u201cEven with higher panel prices, it will still be significantly cheaper than alternatives like diesel,\u201d she said. <\/p>\n
\u201cIt will increase project costs slightly and might delay the project construction pipeline due to supply chain shortages and contractual changes, stockpiling rush, congestion in shipment for the countries heavily reliant on Chinese imports,\u201d said Sonia Dunlop, CEO of the Global Solar Council, an industry association.<\/p>\n
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, van Zuylen said. <\/p>\n
\u201cBatteries matter more than panels for Africa because storage is what makes solar reliable for off-grid and backup users,\u201d he said.<\/p>\n
Basil Abia, co-founder of the Nigerian energy research firm Truva Intelligence, said that \u201cbatteries have historically been expensive, and many solar installations in Africa were built without them.\u201d <\/p>\n
\u201cOnly recently have we started seeing more systems combining solar with battery storage,\u201d Abia said.<\/p>\n
He said that even without rebates, solar modules remain relatively affordable. Through 2024 and early 2025, module prices fell sharply from around $0.25 per watt in previous years to as low as $0.07 per watt.<\/p>\n
Demand for solar, which now supplies 3% of power generation in Africa, is expected to continue growing as storage improves reliability. Meanwhile, the heavy dependence on Chinese equipment is drawing attention to limited local manufacturing capacity.<\/p>\n
\u201cThe VAT removal will slow, but not reverse Africa\u2019s clean energy transition,\u201d Abia said. \u201cCountries that use this moment to accelerate local manufacturing will emerge stronger. Those that do not will remain exposed to Beijing\u2019s next industrial policy adjustment.\u201d<\/p>\n
___<\/p>\n
The Associated Press\u2019 climate and environmental coverage receives financial support from multiple private foundations. AP is solely responsible for all content. Find AP\u2019s standards<\/a> for working with philanthropies, a list of supporters and funded coverage areas at AP.org<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"NAIROBI, Kenya (AP) \u2014 China\u2019s decision to end value-added tax rebates on solar panel exports and phase out…\n","protected":false},"author":2,"featured_media":553053,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[5684,214589,45,49,48,2848,2847,46,2841,1687,214588,304,9605,214590,8545,10428,61,883],"class_list":["post-553052","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-africa","tag-basil-abia","tag-business","tag-ca","tag-canada","tag-climate","tag-climate-and-environment","tag-economy","tag-general-news","tag-international-trade","tag-john-van-zuylen","tag-renewable-energy","tag-solar-power","tag-sonia-dunlop","tag-subsidies","tag-tariffs-and-global-trade","tag-technology","tag-world-news"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/553052","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=553052"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/553052\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/553053"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=553052"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=553052"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=553052"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}