The end of the low-cost solar era
In August 2025, photovoltaic module prices hit a record low: just €0.12/Wp for high-efficiency panels and €0.10/Wp for standard ones on the European market, in some cases even below production costs. But this low-cost phase seems to be closing. While manufacturers welcome the shift, project developers face a more complex scenario.
According to Wood Mackenzie’s latest analysis, solar component and energy storage costs are expected to increase by 9% in Q4 2025.
“In the past 18 months, developers benefited from heavily discounted solar modules and storage systems sold by Chinese manufacturers desperate to clear excess inventory,” said Yana Hryshko, senior research analyst at Wood Mackenzie. “However, this is about to change.”
The report identifies three converging factors behind this shift, primarily driving photovoltaic module prices upward.
Polysilicon prices rise again
The first and most decisive factor involves polysilicon. After 18 consecutive months of price declines caused by China’s aggressive capacity expansion between 2022 and 2024, prices have now stabilized.
New government guidelines have curbed expansion and imposed production limits. Since China accounts for over 93.5% of the global solar-grade silicon industry, any directive from Beijing immediately shapes international market conditions.
As a result, production rates have fallen by 55–70%, and prices have risen by about 48% since late July 2025. Crystalline silicon now sells for around $7.2/kg and could soon reach $7.7/kg.
Goodbye to PERC technology
This shift in silicon policy has affected the entire photovoltaic supply chain, from wafers to cells to finished modules. Production rates have halved, and several manufacturing lines dedicated to PERC (Passivated Emitter and Rear Cell) technology have been shut down.
China’s new fiscal policy reshapes the market
The third major factor influencing the global photovoltaic market is Beijing’s new fiscal policy. Starting in Q4 2025, China will eliminate the 13% VAT refund previously applied to exports of solar panels and energy storage systems.
Given that China supplies more than 80% of the world’s photovoltaic modules and 90% of lithium iron phosphate battery packs, this measure will directly impact global reference prices.
“This change will benefit the sector’s long-term health,” Hryshko explained. “For manufacturers, it’s a welcome opportunity to reinvest and innovate. For developers, it means adjusting procurement expectations. And for policymakers, it’s a timely reminder of the risks of concentrated supply chains.”
The study also notes that developers who signed supply agreements in early 2025 may need to renegotiate production scheduled after November 2025 as the new tariff framework takes effect.