The China Photovoltaic Industry Association expects annual solar additions to fall to between 180 gigawatts (GW) and 240 GW in 2026. That would mark a steep drop from the record 315 GW installed last year, underscoring mounting strains in the world’s largest solar market
China’s solar power sector is bracing for a sharp slowdown in new installations in 2026 after a major policy overhaul last year altered how renewable energy projects are paid, threatening to dent revenues and unsettle investors.
The China Photovoltaic Industry Association (CPIA) expects annual solar additions to fall to between 180 gigawatts (GW) and 240 GW in 2026, Chairman Wang Bohua said at the industry group’s annual conference in Beijing on Thursday. That would mark a steep drop from the record 315 GW installed last year, underscoring mounting strains in the world’s largest solar market.
The forecast comes even as China’s solar capacity is poised to overtake coal as the country’s largest source of installed power capacity this year. But the pace of expansion that defined the past few years appears set to moderate sharply.
Grid strain and pricing overhaul
The breakneck addition of solar farms, which generate electricity only when the sun shines, has piled pressure on power grids already struggling to integrate large volumes of intermittent supply. Authorities have been forced to accelerate investments in transmission lines, energy storage systems and digital tools to ensure renewable electricity is absorbed rather than curtailed.
At the same time, a key policy change rolled out on June 1 last year has altered the economics of new projects. Under the new rules, wind and solar generators must sell power at market-based rates instead of benefiting from government-regulated tariffs. The shift is widely expected to compress margins, particularly in regions where wholesale power prices are volatile or weak.
“Policy shifts such as the market-based pricing scheme for renewables have put market participants in a wait-and-see mode, which will likely result in a drop in installations,” Wang said.
Industry data show installations fell sharply in the months following the implementation of the new pricing regime, signalling developers’ caution amid uncertainty over returns.
Global ripple effects
A downturn in China — which accounts for the lion’s share of global solar demand — would pose fresh challenges for equipment manufacturers. Over the past two years, panel makers have reported steep losses after an aggressive factory build-out led to severe overcapacity and a collapse in module prices.
A slowdown in domestic demand risks exacerbating the supply glut, adding to competitive pressures in overseas markets where Chinese firms have already been aggressively cutting prices to gain share.
Yet industry leaders insist the slowdown may be temporary rather than structural. After an anticipated dip in 2026, solar installations are expected to rebound through the remainder of the decade. Wang projected annual additions averaging between 238 GW and 287 GW from 2026 through 2030.
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