Opinion articles on the Electricity and Renewable Energy Sector

For years, professionals in the photovoltaic sector lived with a very comfortable reality: the prices of solar modules were constantly falling. Since 2023, prices have fallen by around 65%, making solar energy increasingly accessible and competitive. However, that journey has come to an end. The global market for photovoltaic modules is undergoing a readjustment cycle, and the latest data indicates that prices could rise by up to 30% throughout 2026. In this article, we will explore the factors behind this surge, what major Chinese manufacturers are signaling to the market, and what the practical implications are for integrators, distributors, and investors in Brazil. Part 1: What is causing the price increases? To understand the current trend, it is necessary to look at the production chain of photovoltaic modules. The readjustment is not the result of a single factor, but of a combination of structural and macroeconomic pressures that have accumulated throughout 2025. 1.1 The historic appreciation of silver One of the most relevant drivers of this increase was the record appreciation of silver, an essential input in the manufacture of solar cells. In December 2025, the cost of silver paste in high-efficiency cells (US$ 0,0170/W) exceeded the cost of the silicon wafer itself (US$ 0,0169/W). This represents a historic milestone in the industry: for the first time, a secondary input has become more expensive than the main component of the photovoltaic cell. This reversal directly puts pressure on production costs and makes it inevitable that these costs will be passed on throughout the supply chain. https://canalsolar.com.br/prata-sobe-147-2025-custos-industria-solar/ 1.2 Controle de capacidade produtiva pelo governo chinês Outro fator determinante foi a decisão do governo chinês de implementar um controle mais rígido sobre a capacidade produtiva de segmentos estratégicos, como o polissilício. In recent years, Chinese overproduction has been the main driver of falling prices. With this capacity restricted, the market begins to operate with less excess supply, which naturally raises prices and restores a discipline that had disappeared from the sector. 1.3 Exchange rate and macroeconomic factors The devaluation of the real against the dollar and unfavorable macroeconomic conditions in Brazil add an extra layer of pressure. Even if the rise in dollar terms is moderate, the impact in reais could be significantly greater for the domestic market. This context presents an additional challenge for integrators. Part 2: What are the manufacturers saying? Over the past few months, executives from some of China's leading manufacturers have weighed in on the issue. The general view is that the upward trend is structural, not cyclical, and that further adjustments should occur throughout 2026. One important point that manufacturers emphasize, however, is that even with the expected increases, the prices of photovoltaic modules will still remain well below the levels of 2022. The price increase corrects a distortion that had made the market unsustainable for the manufacturers themselves, without necessarily reversing the structural competitiveness of solar energy. Part 3: Practical Implications for the Brazilian Market Having understood the context, it is important to translate these movements into concrete actions for the different agents in the sector. Let's analyze the main implications for each profile. 1.4 The end of Chinese VAT reimbursement — the fiscal factor that has not yet been priced in. In addition to input and exchange rate pressures, there is a fiscal factor that has not yet been fully absorbed by the Brazilian market: the elimination of VAT (Value-Added Tax) reimbursement by the Chinese government for exports of photovoltaic modules, effective from April 1, 2026. To understand the impact, it is necessary to understand the mechanism. VAT is a value-added tax levied on the production of goods in China. Historically, the Chinese government granted exporters a partial refund of this tax as a way to stimulate overseas sales and keep products competitive in the global market. For photovoltaic modules, this benefit reached 13% — it was reduced to 9% in December 2024, when the Chinese government already gave the first sign of a change in stance, and will now be completely eliminated from April 1, 2026. In practice, manufacturers will no longer receive this tax credit, and the trend is for the cost to be passed directly on to the export price. The expected impact is approximately an additional 9% on the FOB price of the modules. In addition to the already ongoing increases in input costs, industry executives estimate a total increase in the price of solar kits of around 35% compared to prices at the end of 2025. For batteries, the withdrawal of the benefit will be gradual: a reduction from 9% to 6% between April and December 2026, with total elimination from January 1, 2027. The storage market will have a slightly longer, but equally inevitable, adjustment timeline. The Brazilian context makes this factor especially critical: more than 90% of the photovoltaic modules used in the country are imported from China. Unlike markets with greater local production capacity, Brazil has virtually no structural protection against a rise in Chinese export prices. Each percentage point adjustment in the FOB price translates directly to the cost of the projects here. One immediate point of attention: the elimination of VAT creates a window for anticipated demand. Equipment shipped before April 1st still benefits from the current 9% incentive. This tends to generate a rush to anticipate shipments in the coming weeks, which may put pressure on stock availability and create price volatility in the short term — including in the Brazilian domestic market. 1. Review of open proposals: Proposals prepared based on 2025 prices may have compromised margins. It is essential to review each open proposal and, if necessary, negotiate adjustments with clients or adjust the project scope. 2. Using price increases as a sales trigger: The prospect of further increases can be used as an argument to accelerate the decision-making process of undecided customers. Those who close deals now can still secure more favorable prices than those who wait until the second half of the year. 3. Renegotiating with suppliers: Integrators with a significant volume of projects should seek price lock-in conditions with distributors and manufacturers. Fixed-price supply contracts for a specified period can be an important safeguard in this scenario. For distributors: Distributors who maintain inventory have a significant window of opportunity. The difference between the current cost price and the future replacement price represents an additional margin that, if well managed, can be a competitive advantage in the coming months. For investors and project developers: Centralized generation projects that are still in the structuring phase should recalibrate their financial models. The increase in the cost of modules directly affects CAPEX and, consequently, the return on investment. In conclusion, the cycle of steadily declining prices for photovoltaic modules has come to an end. The market is entering a new phase, marked by greater price discipline, pressure on inputs, and supply constraints. This does not mean the end of the competitiveness of solar energy — the source is still, and will continue to be, one of the most attractive from an economic point of view. But it requires industry professionals to adapt their operations, revise their financial assumptions, and position themselves strategically to capture the opportunities that this new scenario will also generate.

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