Somewhere in the tumult of the global economy in recent months, solar panel prices hit bottom and then began to rise.

The oversupply that helped to push prices down last year has eased a bit. This, plus a host of other factors, mean that prices are now increasing, globally and in the United States.

Looking ahead, the numbers are likely to continue to rise. But just because they are going up doesn’t mean panels are becoming expensive. Prices will still be low, just not as low as they were late last year.

“I would expect price increases throughout the year,” said Elissa Pierce, an analyst for Wood Mackenzie.

Her research firm projects an average global price of 10.1 cents per watt in the second quarter of this year for panels made in China, an increase from 9.5 cents per watt in the first quarter.

U.S. prices are higher mainly due to tariffs. The average in the United States is projected to be 33.7 cents per watt in the second quarter, up from 30.8 cents per watt in the first quarter, according to Wood Mackenzie.

The prices are for double-sided “TOPCon” panels. TOPCon is a type of polysilicon panel with high efficiency that has grown to become the market leader.

U.S. prices are based on the average for panels made in Cambodia, Malaysia, Thailand and Vietnam, and sold in the United States. U.S. solar manufacturing capacity has grown, but imports remain a majority of sales.

One of the big factors that contributed to decreases last year was oversupply in China and Southeast Asia, with factories producing many more panels than were being sold. This was good for developers of utility-scale solar farms, and bad for panel producers.

“There is still an oversupply,” Pierce said, but it’s less so than before.

Martin Schachinger had an early sense that the market was turning when he wrote in January that global prices were at a crossroads. He has a monthly column for pvXchange.com, a solar industry marketplace that he founded. His latest assessment, published on Monday, is that prices continue to rise moderately.

“The reasons for the general price increase along the entire photovoltaic supply chain can be found, among other things, in increasing domestic demand in China,” he said.

China is the global leader in solar photovoltaic panel production, with an 80 percent share of the market, according to a 2022 report from the International Energy Agency.

President Donald Trump imposed tariffs on Chinese panels during his first term and President Joe Biden allowed those tariffs to continue. The idea was that China’s output was being sold at artificially low prices that were harmful to U.S.-based producers.

Soon after, Southeast Asia emerged as the leading supplier to the United States and had its own controversy as some U.S. businesses said Chinese solar components were being sold through Southeast Asia to get around tariffs. I won’t dwell on the details other than to say that this is an ongoing dispute.

Since Trump returned to the White House in January, he has imposed new tariffs and taken many actions to roll back Biden-era policies that support renewable energy. But some of the most important U.S. policies supporting solar are untouched because they are part of laws that require congressional approval to revise. The big one is the Investment Tax Credit, which is a 30 percent credit on the costs of a solar project.

The possibility of additional tariffs and changes to tax credits has led to a sense of instability in the U.S. solar industry. This is evident in public statements from renewable energy trade groups, which are trying to shore up bipartisan support in Congress to oppose any effort to reduce or eliminate tax credits.

So far I’ve been talking about utility-scale solar—the large projects that feed into the electricity grid. Another important part of the market is distributed solar, customer-owned systems that are on rooftops and in yards of households and businesses.

I spoke with Emily Walker of Energy Sage, a consumer-focused website that has an online marketplace for rooftop solar and energy storage, to get a sense of what’s happening in the rooftop market.

Her data has not shown a clear shift toward higher prices. The median cost per watt has essentially been flat since going from $2.50 per watt in June to $2.49 per watt in March. (This is an all-in rooftop solar price for the end user, including equipment, labor and financing costs, so it’s not comparable to utility-scale panel prices that just include the panels.)

Her website focuses on total costs for the end user for mostly small projects. The fact that prices are flat indicates that solar installers are absorbing the small shifts they may be seeing in their costs of goods.

I asked Walker what she views as the biggest unanswered questions in the market.

“As electricity prices continue to rise, I want to understand how that is impacting solar pricing and solar demand,” she said. 

She is curious, as we all are, about what federal policy changes to solar incentives may still be coming.

“I think everybody right now is talking about incentives, so that’s the biggest unanswered question for everyone in the industry,” she said. “Right now we’re really in this waiting game of like, ‘What’s going to happen?’—which, in a lot of ways, is more difficult than just having a decision one way or another, because there’s just so much uncertainty right now in terms of how it will impact pricing, how it will impact demand.”

Other stories about the energy transition to take note of this week:

How We Got a Green Bank, How Trump Is Trying to Kill It and Who Gets Hurt: This story traces the history of U.S. efforts to start a “green bank” to provide loans for energy producing and energy saving projects, the current legal fight as the Trump administration tries to shut it down, plus a look at the people in communities across the country who are affected, reported by me and my colleague Marianne Lavelle.

A Battery Recycler Is Struggling to Stay in Business: Li-Cycle, a Canadian battery recycler that planned to open a major facility in Rochester, New York, has said it is in financial distress and may not meet the conditions to be able to receive a $475 million federal loan that it was going to use to build the new location, as Benjamin Storrow reports for E&E News. Li-Cycle, which I wrote about in 2022, was going to be a major part of setting up a recycling infrastructure to deal with the expected increase in lithium-ion batteries. But its projects have run behind schedule and its money has dwindled.

Probing the Decrease in Hydropower Coming From Canada: Amid intense trade tensions between the United States and Canada, a major source of hydropower has stopped, as Sarah Shemkus reports for Canary Media. Hydro‑Québec has stopped exporting electricity to the New England grid, but the Canadian company says this is because of low prices in the New England market. Electricity demand is low this time of year, and it remains to be seen what Hydro‑Québec will do when demand is higher.

Tesla Reports a Plunge in First Quarter Sales: Tesla reported a 13 percent decrease in sales for the first quarter, its worst showing since 2022, as Akash Sriram reports for Reuters. The poor performance was not surprising considering the company’s failure to introduce compelling updates to its lineup and CEO Elon Musk’s high-profile political activism that has alienated many customers.

Actions at a Georgia Hyundai Plant Show an Auto Industry Hedging Its Bets on EVs: A new Hyundai automobile plant near Savannah, Georgia, was initially going to exclusively make EVs. But at a grand opening event last month, the word “electric” was not said once by company officials from the dais, as Camila Domonoske reports for NPR. Behind the scenes, the company has shifted its plans and will make EVs along with gas-electric hybrids at the plant, and is no longer talking about the plant in ways that emphasize a focus on EVs. This is a signal of a broader change in the auto industry as companies say EV sales are growing more slowly than they expected and many consumers prefer hybrids.

Inside Clean Energy is ICN’s weekly bulletin of news and analysis about the energy transition. Send news tips and questions to [email protected].

Dan Gearino

Reporter, Clean Energy

Dan Gearino covers the midwestern United States, part of ICN’s National Environment Reporting Network. His coverage deals with the business side of the clean-energy transition and he writes ICN’s Inside Clean Energy newsletter. He came to ICN in 2018 after a nine-year tenure at The Columbus Dispatch, where he covered the business of energy. Before that, he covered politics and business in Iowa and in New Hampshire. He grew up in Warren County, Iowa, just south of Des Moines, and lives in Columbus, Ohio.

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