China is withdrawing solar subsidies – what this means for UK commercial energy users

For more than a decade, the commercial sector has benefited from falling solar prices. China’s manufacturing scale and long-term subsidies drove equipment costs to record lows through 2024 and early 2025.

That landscape is beginning to shift. China is now withdrawing several incentives that have supported global affordability, including an estimated 30% reduction in the global solar module output tied to these subsidies, according to recent data from the International Energy Agency (IEA). These changes will influence international pricing and the financial profile of commercial installations through 2026 and beyond.

In this blog, we cover how:

• China is reducing support for solar manufacturers
• How this affects global commercial solar pricing
• What UK businesses need to consider
• A narrowing window of opportunity
• Supporting commercial energy users across the UK

China is reducing support for solar manufacturers

Beijing has begun a phased rollback of the policies that helped accelerate global solar deployment. Key changes include:

• Reduced export tax rebates for photovoltaic products
• Removal of the 13% VAT export rebate for solar modules and energy storage systems from Q4 2025
• A broader transition away from domestic clean-energy subsidies towards market-based pricing

These reforms aim to address overcapacity in China’s solar sector and stabilise an industry that has expanded rapidly.

How this affects global commercial solar pricing

China remains the dominant force in the global solar supply chain. Policy changes of this scale quickly affect international markets, influencing procurement costs for major commercial projects.

Industry analysis already points to several emerging trends:

• The era of unusually low module pricing is drawing to a close
• Equipment costs for projects scheduled into late 2026 are expected to increase
• Delaying procurement increases exposure to cost inflation and lengthens payback periods

For UK commercial organisations evaluating solar, acting swiftly to implement projects can translate into a significant competitive advantage. Early movers lock in a multi-year cost advantage by securing lower pricing before the forecasted price increases take effect. This not only improves payback periods but positions them ahead of their peers who may delay and face higher costs.

What UK businesses need to consider

Large-scale users in manufacturing, logistics, warehousing, engineering and similar sectors will be most affected by these pricing shifts. Early engagement offers several advantages:

Secure current pricing before costs rise

With export rebates being phased out, equipment prices are expected to increase. Procuring earlier helps protect project budgets.

Strengthen the financial performance of the project

Lower capital expenditure delivers shorter payback periods and stronger long-term returns.

Reduce supply chain risk

As more organisations seek to secure pre-increase pricing, demand for equipment and installation capacity is likely to intensify. Early scheduling provides greater certainty. To further reduce supply chain risk, businesses can lock multi-year module contracts or diversify their supplier base.

A narrowing window of opportunity

The next twelve months may be the final stretch of historically low commercial solar pricing. As global supply chains adjust and subsidies are phased out, higher baseline costs are increasingly likely. For example, a six-month wait could add £50,000 to a 1 MW system, highlighting the need to act promptly.

For businesses that have been weighing the move to solar, this is a prime moment to progress plans before the market shifts.

Supporting commercial energy users across the UK

We are already working with clients to secure current pricing and protect project value ahead of expected global changes. If you would like a detailed proposal showing the savings available today or clarity on how China’s policy adjustments may affect your project, our team is ready to assist.

Speak with us to explore the most cost-effective route to commercial solar for your organisation.