Solar photovoltaic (PV) panels have become one of the cheapest electricity sources globally, with prices dropping 90% over the past decade. However, a confluence of factors—including China's tax reforms, rising silver costs, and geopolitical instability—threatens to reverse this trend. For European households and businesses, this could signal a critical window to invest before prices climb.
Europe's Solar Dependence on China
The European Union imported €11.1 billion worth of solar panels in 2024, with China supplying 98% of those imports. Chinese manufacturers dominate every stage of production, from polysilicon to final assembly, thanks to over $50 billion in investments since 2011. As Jannik Schall of clean tech startup 1KOMMA5° notes, "Chinese manufacturers have reached scale and cost levels that cannot be matched outside of China." European factories, focused on final assembly, cannot compete on price.
This dependency leaves Europe vulnerable to policy shifts in Beijing. In a move to curb overcapacity and losses—Chinese solar firms have accumulated net losses of $5 billion since early 2024—China eliminated the 9% VAT export rebate on solar products from 1 April 2026. The rebate on battery products was cut to 6%, with a full phase-out by 1 January 2027.
Price Impact and Market Dynamics
Schall warns that the VAT reform alone will push module prices up by around 10%. British newspaper The i reports one installer has already added £800 (€918) to the cost of an average rooftop system. However, analysts caution that the market reacts slowly. InfoLink Consulting, a Taipei-based firm, notes that ground-mounted projects have edged up, but small-scale distributed systems—like rooftop installations—have continued to fall marginally.
Demand remains robust. In March 2026, several European countries, including France, Italy, Poland, and Romania, hit all-time records for Chinese solar imports, as buyers rushed to beat the price hike. The ongoing conflict in the Middle East, particularly the Iran crisis, has further boosted interest in household electrification, with energy firms across Europe reporting a spike in solar panel and battery inquiries. Solar has already saved Europe over €100 million per day in March by reducing gas imports, and experts estimate savings could reach €67.5 billion by year-end if fossil fuel prices stay high.
The Silver Factor
Silver, a key conductor in PV panels, adds another layer of cost pressure. Despite comprising less than 5% of a panel's weight, silver accounts for a significant share of material costs. Rising silver prices, driven by industrial demand and supply constraints, could further inflate panel prices. This interplay of materials and geopolitics underscores that even renewables are not immune to global shocks—a point often raised in debates about fossil fuel volatility.
For European consumers, the message is clear: while prices have not yet surged across the board, the window of opportunity may be narrowing. As the EU pushes for a clean transition—solar now supplies 23.4% of its electricity—investing now could lock in lower costs before China's reforms and silver dynamics fully take effect. The continent's reliance on imports, coupled with geopolitical tensions, makes this a strategic moment for households and businesses to consider solar installations.
