Solar Module Prices Are Rising in 2026: China VAT Removal and a US Pricing Floor
Section 201 tariffs expired — so panels should be cheaper. They're not. Here's why module prices climbed to ~$0.28/W, and why your installed quote will barely move.
Update (July 2, 2026): The module-price rise documented below has since reversed. Overwhelming manufacturing overcapacity (~1.8 TW) drove module prices to all-time lows of ~$0.10/W — below the cost of production. See our update: Solar Panel Prices Just Hit $0.10/W.
By the textbook, 2026 was supposed to be the year solar panels got cheaper. On February 7, 2026, the Section 201 tariffs that had taxed imported solar cells and modules since 2018 finally expired, making imported panels duty-free again. Stripping a tariff off an imported good is supposed to lower its price. Instead, US module prices climbed to roughly $0.28 per watt — up from the sub-$0.20/W trough of 2024.
That is the counterintuitive move this article is about. The Section 201 story is real and we've covered its mechanics in depth (see our tariff expiry explainer and our broader trade-policy guide). But the tariff expiry is only one lever, and three other forces are pushing the other way — hard enough to more than offset it. The net result is a residential solar market where the modulecosts more, even as the total installed system price you're quoted stays remarkably stable.
The Numbers Behind the Move
| Figure | Value | Context |
|---|---|---|
| Module price, 2024 | ~$0.18–0.20/W | near all-time lows |
| Module price, 2026 | ~$0.28/W | up ~40%+ from trough |
| Global solar additions, 2025 | 511 GW | record annual installations |
| Typical US installed cost, residential | ~$3.00–3.50/W | module is only one input |
Source: industry market reporting and US trade data. Module prices refer to wholesale panel-only cost; installed cost-per-watt includes labor, inverters, racking, permitting, and installer margin.
Read the table and the tension is obvious. Wholesale module prices rose roughly 40%+ off their 2024 lows, landing near $0.28/W — yet the residential installed cost a homeowner actually pays sits in a much wider band around $3.00–$3.50/W. That gap between a few cents on the module and a few dollars on the system is the most important practical takeaway in this article, and we'll come back to it.
Why Prices Are Rising: Three Forces
The Section 201 expiry pulled one cost down. Three other forces are pushing up, and together they win.
1. China's VAT export-rebate removal
For years, Beijing rebated the value-added tax on exported solar modules, effectively subsidizing the overseas price of Chinese panels and helping drive the global race-to-the-bottom that produced 2024's sub-$0.20/W lows. China has now removed that export rebate. The mechanism that suppressed global module prices is gone, and the immediate effect is a higher floor on Chinese-origin panels worldwide — including the panels that previously undercut every other supplier. When the cheapest producer raises its floor, everyone else's prices rise too.
2. FEOC supply tightening
Under the Inflation Reduction Act's successor rules (reshaped by the One Big Beautiful Bill Act), systems claiming federal clean-energy tax credits must steer clear of Foreign Entities of Concern (FEOC) — broadly, entities tied to China, Russia, Iran, and North Korea. That compliance rule doesn't ban Chinese panels outright, but it funnels credit-eligible demand toward a much smaller pool of compliant supply. Concentrate the same demand on less supply and you get exactly what economics predicts: upward price pressure on the compliant tier. We break down how the FEOC rules interact with the tariff stack in our trade-policy guide.
3. Record demand outpacing capacity
The third force is sheer volume. The world added 511 GW of solar in 2025 — a record. Even with manufacturing capacity expanding aggressively, absorbing half a terawatt of installations in a single year tightens the market for compliant, high-quality modules. Demand at that scale gives suppliers pricing power they simply didn't have in 2024's glut.
Stack all three — a higher Chinese floor, a shrunken compliant-supply pool, and record absorption — and the few cents per watt that the Section 201 expiry saved get spent several times over. Net module prices go up, not down.
The key distinction: the tariff story and the price story are not the same story. Tariffs on imported panels came off. The price of those panels went up anyway, because the non-tariff forces (VAT rebates, FEOC, demand) are larger than the tariff that was removed.
Why Your Quote Won't Move Much
Here is the part that should calm every homeowner reading this. The module is only one line item in a residential install, and it is not even the largest. Of a typical $3.00–$3.50/Winstalled residential price, the panel itself is roughly a quarter to a third. The rest is soft costs: installation labor, racking and electrical balance-of-system, inverters, permitting and inspection, customer acquisition, and the installer's margin.
So when wholesale module prices move from, say, $0.20/W to $0.28/W — an eight-cent swing that sounds dramatic as a percentage — the installed cost moves by a fraction of that eight cents, after the installer's markup and inventory lag. On a 7 kW system that's tens of dollars per month on a financed quote, not hundreds. Real, but bounded. The levers that swing your total cost far more than the module are the ones you actually control: cost-per-watt comparison across installers, the financing structure you choose, and the soft costs baked into the quote.
What Homeowners Should Do
- Compare quotes on cost-per-watt, not monthly payment.A low monthly payment can hide a high total cost. Normalize every quote to dollars per watt and compare like for like. See how your state benchmarks: California cost-per-watt and Texas cost-per-watt are good reference points.
- Confirm your panels are FEOC-compliant. If you or your installer intend to capture any federal benefit, the module's origin matters. Use our Panel Comparison to check tier ratings, efficiency, and compliance flags before you sign.
- Run your own numbers with updated pricing. Our Solar ROI Calculator and System Size Calculatorreflect current installed-cost bands, so you'll know whether a quote is in the right neighborhood before you commit.
- Read the hidden costs that move a quote more than the module. Panel-upgrade fees, main-panel upgrades, conduit runs, and permit surprises routinely shift a quote by more than the entire module-price swing. Our Hidden Costs tool walks through every category to scrutinize.
Module prices are rising and are likely to stay elevated as long as China's VAT rebate stays removed, FEOC rules concentrate compliant demand, and global installations keep setting records. That is a genuine market story worth understanding. But for the homeowner deciding whether to go solar, the module-price headline is mostly noise. The number that determines whether solar pays off for you is your all-in cost-per-watt and the financing structure around it — and both of those are levers you control by comparing quotes carefully.
The smart move in a rising-module-price environment is the same as in any other: get multiple quotes, normalize them to cost-per-watt, stress-test the financing, and run the numbers yourself before you sign. The tools below do exactly that.
This article provides general information, not trade or investment advice. Module-price and installation figures are approximate, drawn from industry market reporting and US trade data, and they change. Always confirm current pricing with active quotes before making a purchase decision.