The price of batteries could enter a cycle change during 2026. Lucía Dólera , head of business development for utility-scale energy storage systems in Europe at JinkoSolar, anticipates that the market will tend to stabilize at values up to 20% higher than those recorded during 2024 and 2025 , following China's fiscal adjustment, the rebound in global demand, and the volatility of lithium carbonate.
One of the factors explaining this is China's decision to gradually reduce tax incentives for battery exports. As of April 1, 2026, the VAT refund was reduced from 9% to 6%, and the benefit will be eliminated entirely from January 1, 2027. The measure aims to regulate a market that, in recent years, has been characterized by significant pressure on manufacturers' profit margins.
“Between August, September and October of 2025, projects were carried out with a really competitive price and since then prices have been increasing,” said Dólera in dialogue with Energía Estratégica .
Volatility continues to be one of the main challenges for manufacturers and integrators. According to Dólera, the lithium carbonate price curve registered increases of nearly 20% in just three consecutive days, a dynamic that “makes it difficult to maintain commercial offers over extended periods.”
According to the Jinko Solar representative, the spot price of lithium carbonate was recently above 178,000 yuan per ton, equivalent to between USD 20,000 and 25,000, in a context marked by an acceleration of demand and greater tensions on the supply of raw materials.
From the manufacturers' perspective, any variation in the price of lithium has direct consequences on the final cost of storage systems. "Every 1% increase in the price of lithium carbonate translates to a 0.3% increase in the final price of the system," the executive explained.
Dólera attributes this upward pressure to the simultaneous growth in domestic and international demand for batteries, especially in China, where greater production capacity for LFP technologies is needed. He indicated that during the first half of the year, a significant increase in lithium carbonate purchases was observed, driving an upward trend in prices.
This is compounded by restrictions on the extraction of lithium and other raw materials. "A series of current circumstances are causing this price volatility," Dólera stated.
Are people making advance purchases in anticipation of the end of incentives?
Although the complete elimination of the tax benefit will not take effect until January 1, 2027, some buyers have already begun adapting their business strategies. According to Dólera, following the announcements made by Beijing, there has been an acceleration in orders and greater interest in securing current conditions before the incentive is definitively eliminated.
"Yes, we are seeing an acceleration in terms of requesting the supply that will be produced during this year," he said.
The executive explained that some clients even request to keep equipment in special logistics or customs zones within China to complete operations under the current scheme, even though the final delivery of the projects takes place later.
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The market reaction shows that industry players do not expect an immediate and abrupt impact, but rather a gradual price adjustment as the mechanisms that for years boosted the competitiveness of Chinese exports disappear.
Demand also shows no signs of slowing. The latest data from China shows that new energy vehicle production reached 1.32 million units, while sales grew 9.7% year-on-year to 1.34 million. At the same time, Beijing announced plans to double the country's electric vehicle charging capacity to 180 GW by 2027, strengthening the outlook for battery consumption across the entire value chain.
Furthermore, supply chain tensions persist. Dólera mentions production restrictions in various markets, particularly in West Africa, while countries like Zimbabwe are moving forward with new limitations on lithium concentrate exports to encourage local processing.
The reform bears similarities to the measures Beijing recently implemented in the photovoltaic industry. For the past few years, tax rebates have allowed numerous manufacturers to use this benefit to submit extremely aggressive bids in international markets, a dynamic that ultimately eroded the sector's profitability and pushed prices below levels considered sustainable.
"Tier 2 or Tier 3 companies with a short-term focus are very aggressive on price, using this form of tax discount to make offers below the manufacturing price, below the real cost, which ultimately weakens the sector in the long run. At BESS, we cannot offer anything less than top-quality products; we cannot allow substandard projects that fail to meet the highest quality standards," he stated.
According to the executive, the gradual elimination of the incentive could help restore more balanced margins and prevent energy storage from repeating some of the distortions experienced by solar panel manufacturing over the past decade. "This cancellation will bring us back to normal margin levels . I think it will be very beneficial for the industry," she stated.
More expensive, but just as profitable?
Despite expectations of higher prices, energy storage continues to improve its economic competitiveness. According to Dólera, the projected increase for 2026 does not alter the fundamentals of a market that is increasingly finding new revenue streams and applications within electrical systems.
"We're already talking about your payback period being well below five years," he stated.
The executive explains that profitability no longer depends solely on energy arbitrage. In several markets, storage systems can combine revenues from balancing services, day-ahead and intraday markets, frequency regulation, and capacity mechanisms—a strategy known as stack revenues.
In certain segments, even "recovery periods are considerably shorter, reaching two years"
Beyond cost trends, the need for energy storage continues to grow in tandem with renewable energy expansion. According to Dólera, markets with high solar and wind power generation penetration face an increasingly evident challenge: utilizing all the energy produced.
"It's not fair that we've made such a large investment in renewables and now we're seeing signs of cutting renewable generation," he said.
This evolution is also reflected in the inquiries JinkoSolar receives. While years ago standalone projects intended to provide services to the grid predominated, currently most developers are looking to hybridize their photovoltaic pipeline.