Europe without cheap panels from China? The energy transition enters a more challenging phase.

The energy transition in 2026 is set to accelerate, but its cost—both economic and political—will become increasingly evident. According to the Energy Outlook 2026 report prepared by ING analysts, Europe and the United States are entering a phase in which the growth of renewable energy is no longer a straightforward function of cheap technologies and ambitious climate targets. Supply security, trade policy, and efforts to rebuild domestic industry are playing an increasingly important role.

The end of the “cheap renewables” era?

One of the key findings of the ING report is that reducing dependence on renewable energy components from China—primarily solar panels—could significantly increase the cost of new investments in the short term. Today, as much as 98% of solar panels imported into the European Union come from China. Moving away from this model would not only raise prices but also disrupt supply chains and slow the pace of installations.

Analysts emphasize that while these decisions are politically understandable, economically they could become a serious challenge as early as 2026. Europe will need to balance the long-term benefits of rebuilding domestic industry with the short-term need for fast and affordable decarbonization.

Renewable energy auctions without Chinese components

The first clear signal of this policy shift came from Italy, which in December 2025 conducted a renewable energy auction excluding Chinese modules, cells, and inverters. According to BloombergNEF estimates, this increased project costs by up to 17%.

ING expects similar measures to appear in other EU countries in 2026, whether through direct bans or preferential treatment for components manufactured in Europe. The problem is that the current level of EU financial support is too low to quickly trigger significant private investments in new production capacity. As a result, the European solar industry may struggle to keep up with the EU’s climate ambitions.

China plays the long game

While Europe and the U.S. are trying to reduce dependence on imports, China is steadily pursuing its own strategy. The country not only dominates the production of solar panels and wind turbines but is also rapidly expanding its domestic renewable energy market.

According to think tank Ember, by April 2025, wind and solar energy accounted for 26% of electricity generation in China. ING forecasts that by 2026, China will have 46% of global installed capacity in battery energy storage systems, benefiting from cost advantages and deployment scale.

China’s renewable energy expansion is part of a broader goal: reducing emissions by 7–10% by 2035 relative to peak levels. This means that despite trade tensions, China does not intend to slow the pace of its energy transition.

U.S.: Renewables driven by AI and tariffs

The United States is taking a different path than Europe. There, the main driver of energy demand—including renewable energy—is the growth of artificial intelligence and data centers. At the same time, the U.S. administration is increasingly using trade tools aggressively.

In 2025, Washington imposed very high tariffs on PV components from Southeast Asian countries, reaching up to 670%, as well as 50% tariffs on steel products used in wind energy. Investigations into imports from India, Laos, and Indonesia are also ongoing, indicating further tightening of trade policy.

Energy storage—a bright spot in the transition

One of the most optimistic aspects of the ING report is the energy storage market. Thanks to technological progress, the cost of battery energy storage systems fell by 61% between 2020 and 2025. Combined with growing demand, this is expected to translate into an average annual growth rate of installed capacity of 31% through 2030.

Energy storage is expected to become a key element in stabilizing energy systems based on intermittent renewable sources—especially in Europe.