In the first quarter of 2026, the main driver of price increases in the PV module market was the Chinese government’s decision to end export-related tax incentives by 1 April, triggering a rush to secure volumes. Most tier-1 factories were sold out by March and prices rose 15–20%.
The policy change compressed demand into a single quarter, pushing prices higher. Upstream cost pressures also contributed, with higher silver prices increasing module production costs. As a critical material in PV cell manufacturing, silver has a significant impact on pricing sensitivity.
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Following the Chinese New Year, production resumed and the market adjusted. Module prices are easing slightly, while polysilicon prices remain stable. This indicates the recent spike was driven by timing and availability rather than a structural shortage. For European buyers, the pattern is familiar: volatility followed by renewed competitive pressure, with global supply-demand imbalances persisting and manufacturing capacity remaining substantial.
Geopolitics becomes a factor, but not yet in pricing.
Tensions in the Middle East, including confrontations involving the United States, Israel and Iran, have pushed up oil and gas prices, raising expected manufacturing and logistics costs and potentially supporting renewable demand. So far, however, solar and storage prices have not reacted. Logistics are affected, with transport costs rising modestly, but module and battery prices remain stable due to ongoing oversupply and strong competition.
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The key driver is delayed demand. If high energy prices persist, demand for solar and storage is likely to rise, as seen during the Russia–Ukraine conflict. The price impact of geopolitics is therefore not immediate but demand-driven and lagged. If demand begins to catch up with global production capacity, pricing could firm gradually.
The market is stabilising after a policy-driven spike. In the medium term, external factors, particularly energy markets, may shape the outlook. For now, the spike has passed, but uncertainty remains. (Gerard Scheper/hcn)
