According to Reuters, Tesla is in talks to purchase equipment worth about $2.9 billion from Chinese firms to build large-scale solar manufacturing capacity in the United States, as CEO Elon Musk targets up to 100 gigawatts of solar production.
The development has already lifted shares of several Chinese solar companies, signalling renewed global demand for the sector.
Days later, AP News reported that China had decided to end value-added tax rebates on solar panel exports and phase out incentives for battery storage equipment, a move expected to raise solar prices in Africa, where countries rely heavily on imported Chinese technology.
The changes, set to take effect April 1 for solar panels and from next year for batteries, could increase expenses across the continent as governments work to close persistent electricity gaps.
“We are likely to see solar panel prices increase in Africa because most of the inputs come from China,” said Wangari Muchiri, an energy analyst focused on Africa’s clean energy sector. “Removing the rebate will add to existing costs, especially when you consider shipping, logistics and other import fees.”
Africa exposed as global demand reshapes pricing
Africa already pays more for solar equipment than many regions due to higher transport costs, smaller import volumes and tariffs, making it particularly vulnerable to price adjustments from Beijing.
China’s policy shift reflects a broader reset in its solar industry after years of intense competition drove module prices down to about $0.07 per watt in 2025, from $0.25 in 2022, according to AP News.
While the price drop accelerated global adoption, it also left manufacturers with thin margins.
With demand now rising again, highlighted by Elon Musk’s procurement plans, Beijing appears to be scaling back subsidies to stabilise prices and curb excess capacity.
Chinese media reported that delegations linked to Musk recently visited several solar manufacturers, including Suzhou Maxwell Technologies, as part of efforts to secure equipment for U.S.-based production.
Some of the estimated 20 billion yuan ($2.9 billion) worth of equipment orders may require export approval from Chinese regulators, underscoring Beijing’s tightening control over strategic clean energy supply chains.
Gradual price rise, not a shock
Experts say Africa is unlikely to face a sudden spike in solar prices but should instead expect a gradual upward increase as market dynamics adjust.
“The changes are significant, but not catastrophic,” said John van Zuylen, CEO of the Africa Solar Industry Association.
“When a structural rebate is removed, exporters typically absorb some cost, raise prices or reduce discounting. African countries will likely feel this as a steady upward shift rather than a dramatic spike.”
“The entire recent solar boom was built on artificially cheap Chinese pricing,” he said. “That era is now ending.”
Despite the anticipated rise in costs, solar power is expected to remain the most affordable energy source across much of Africa.
However, the policy changes could create short-term pressure on project timelines and supply chains.
“It will increase project costs slightly and might delay the project construction pipeline due to supply chain shortages and contractual changes, stockpiling rush, congestion in shipment for the countries heavily reliant on Chinese imports,” said Sonia Dunlop, CEO of the Global Solar Council, in comments to AP News.
