China's Ministry of Finance announced on 9 January 2026 that the country would scrap export VAT rebates across a long list of products from 1 April. Solar panels lost the rebate entirely. Battery products had theirs cut from 9% to 6%, with the rest scheduled to disappear on 1 January 2027.
The rebate worked exactly like it sounds. Chinese manufacturers paid VAT on what they produced, then claimed a chunk of it back when they exported. Removing it adds roughly 9% to the underlying export cost of every panel leaving China.
This is not a tariff. It is China deliberately raising the price of its own exports to slow the race to the bottom in panel prices, protect its domestic manufacturers, and reduce trade friction with the US and EU. It is a structural change, not a temporary measure.
Around 80% of the world's solar panels are manufactured in China. Most of the panels installed on UK rooftops, including premium European-branded options, contain Chinese cells or are Chinese-made entirely. There is no domestic alternative at scale.
When the underlying cost of a Chinese panel goes up by 9%, that figure works through wholesale prices, then through installer pricing, and eventually into your quote. The lag is typically three to six months as existing stock sells through.
Several of the world's largest panel manufacturers have already moved on price. Trina Solar, Jinko Solar, JA Solar, and Astronergy all increased their prices in the first quarter of 2026.
Most analyst forecasts put UK retail price rises at 8% to 15% over the next six to twelve months. That figure is the rebate change working through the supply chain. There is also a separate pressure pushing in the same direction: silver, which is a key input to solar cell manufacturing, rose more than 30% in 2025 and continued upward into 2026.
For a typical 4 kW residential system installed by an MCS-certified installer, that translates to a few hundred pounds difference between a quote in March 2026 and a quote in October 2026.
Batteries are on a slower timeline. The Chinese rebate on batteries dropped from 9% to 6% in April, and the remaining 6% goes on 1 January 2027. So battery prices will rise in two steps rather than one, with the larger move coming later this year and into early 2027.
For homeowners considering a Tesla Powerwall 3, a Sigenergy SigenStor, or any other home battery, the practical takeaway is that the lowest battery prices of this cycle are probably behind us. Expect a more pronounced rise from late 2026 into early 2027 as the second part of the rebate change takes effect.
The honest answer depends on what you are waiting for.
If you are waiting for prices to fall, that ship has sailed. Solar panel prices fell roughly 25% to 35% between early 2024 and early 2026 because of Chinese manufacturing overcapacity. That overcapacity is exactly what the rebate change is designed to clear up. The price floor is rising.
If you are waiting for a roof replacement, an extension, or a tariff change you can plan around, those are good reasons to delay. Just go in with realistic expectations on what you will pay.
If you are simply procrastinating, this is the year to stop. A quote secured in May 2026 with a sensible validity window will look better in retrospect than a quote in October.
Panel prices in the UK have bottomed out and are moving upward for the first time in two years. The China VAT change on 1 April 2026 is the main reason, and battery prices will follow on a delayed schedule.
Spirit Energy has been installing solar across southern England and the UK since 2010, with over 6,000 systems completed. If you would like a no-obligation quote at current prices, call us on 0118 951 4490 or request a quote through our website.