If you’ve been considering installing or upgrading a solar and battery system for your home or business, the opportunity to secure current pricing may be closing sooner than expected.
A combination of major policy changes in China and a surging raw material market is creating a perfect storm to drive up the cost of renewable energy hardware for solar and battery systems significantly throughout 2026. Here is a breakdown of this news and what it means for Australian energy consumers.
On January 9, 2026, China’s Ministry of Finance announced a major overhaul of its export tax rebate system, a move that directly impacts global solar and battery products.
Solar Panels (PV): From April 1, 2026, export Value-Added Tax (VAT) rebates for photovoltaic products will be completely removed.
Batteries: Battery export rebates will be reduced from 9% to 6% starting April 1, and will be eliminated entirely by January 1, 2027.
For years, these rebates allowed Chinese manufacturers to export products at lower prices. With these tax incentives vanishing, manufacturers will likely pass these costs on to international buyers. This effectively raises the floor price for solar panels and batteries arriving in Australia later this year.
While the tax changes are a policy-driven cost increase, the raw materials market is facing its own pressure. After a period of lower prices, lithium which is a key ingredient in battery storage, is entering a new uptrend.
According to recent reports from Reuters, Argus Media and Nasdaq:
Supply deficit: Analysts forecast the lithium market will shift from a surplus in 2025 to a deficit in 2026.
Price reaction: Following the news of China’s tax changes, lithium futures have already surged, with investors betting that manufacturers will rush to buy materials and export batteries before the April deadline.
The combination of higher raw material costs and the removal of export tax rebates means the era of falling solar and battery prices is likely pausing, if not reversing.
Short-term rush: A surge of front-loaded exports is expected in Q1 2026 as manufacturers try to beat the April 1 deadline. This may keep stock flowing briefly but could also lead to logistical bottlenecks.
Mid-term price increases: Once the new tax rules take effect and higher lithium costs filter through the supply chain, retail prices for residential and commercial solar and battery systems are expected to rise.
If you have a quote sitting on your desk or have been waiting for the “bottom of the market,” current indicators suggest the bottom may already be behind us. Securing your solar and battery installation now could save you significantly compared to projected prices later in 2026.