BUSINESS

China’s New Solar Power Capacity to Drop for First Time in Seven Years

Published: Feb. 6, 2026 2:27 a.m. GMT+8

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Workers install solar photovoltaic panels in Xiangyang, Hubei province, on Sept. 27, 2025. Photo: VCG

China’s solar power additions are set to decline in 2026 for the first time in seven years, as the industry confronts severe overcapacity and shifts toward market-oriented electricity pricing after a record installation surge last year.

Newly installed capacity is forecast at 180 to 240 gigawatts (GW), down 24% to 43% from 2025, Wang Bohua, a consultant with the China Photovoltaic Industry Association (CPIA), said at the group’s annual symposium on Feb. 5. The outlook marks the first annual contraction since 2019.

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China’s new solar capacity is projected to fall to 180–240 GW in 2026, a 24–43% drop from 2025, marking the first decline since 2019.
Industry faces severe overcapacity; 2025 production far exceeds demand, pushing prices of key components down 62–83% from 2021 to 2025.
Global solar installations are expected to decline 0.7% in 2026 to 648 GW, per BloombergNEF, with market saturation and policy changes cited.

AI generated, for reference only

What Happened When

Between 2021 and 2025：: Prices for polysilicon, wafers, cells, and modules dropped by 76.3%, 82.8%, 71.1%, and 62.1%, respectively.

February 2025：: The National Development and Reform Commission and the National Energy Administration issued guidelines about new market-based pricing requirements for solar projects.

First half of 2025：: Developers accelerated solar installation projects in China, leading to 212.2 GW of new installations—a year-on-year doubling.

June 2025：: Monthly installations collapsed, plunging about 85% compared to the previous month after the policy window for more favorable returns closed.

After June 1, 2025：: New projects in China are required to bid for grid access and face market-based pricing, as per guidelines issued in February 2025.

By the end of 2025：: China’s production capacity for polysilicon, wafers, cells, and modules reached over 3.5 million tons, 1,500 GW, 1,400 GW, and 1,100 GW, respectively.

End of 2024 vs. End of 2025：: Capacities for polysilicon, wafers, and cells grew by 9%, 11%, and 7%, respectively, while module capacity decreased by 5%.

February 5, 2026：: Wang Bohua, a consultant with the China Photovoltaic Industry Association (CPIA), announced at the group’s annual symposium that China’s solar power additions are set to decline in 2026 for the first time in seven years.

February 5, 2026：: Wang Shijiang, deputy director at the Ministry of Industry and Information Technology, stated that addressing excessive competition in the solar industry is a top priority for 2026.

AI generated, for reference only