Key facts
- China's solar lobby expects installations to fall by 66% in 2026.
- The expected range for 2026 installations is 180 GW to 240 GW, down from 315 GW last year.
- A policy shift to market-based pricing for renewables is impacting revenues and investor confidence.
- Leading solar manufacturers have cut approximately 87,000 jobs in 2024.
- Over 40 solar companies have faced bankruptcy, mergers, or delistings since 2024.
China's solar industry is bracing for a significant slowdown in new installations in 2026, with the China Photovoltaic Industry Association (CPIA) forecasting a 66% drop to between 180 GW and 240 GW. This marks a sharp decrease from the record 315 GW added in the previous year.
The downturn is attributed to a major policy overhaul implemented in June of the prior year, which shifted renewable energy projects from government-regulated tariffs to market-based rates. This change is expected to compress margins, leading market participants to adopt a cautious, "wait-and-see" approach.
The slowdown in China, which accounts for a substantial portion of global solar demand, could exacerbate existing overcapacity issues among equipment manufacturers and intensify competitive pressures in international markets. Panel makers have already reported steep losses due to aggressive factory build-outs leading to a collapse in module prices.
Despite the current turmoil, industry leaders suggest the contraction may be temporary. The CPIA projects that annual additions will rebound to an average of 238 GW to 287 GW between 2026 and 2030. However, the immediate impact is severe, with leading solar manufacturers having collectively cut around 87,000 jobs in 2024 and over 40 companies facing bankruptcy, mergers, or delistings since the start of the year.
Chinese President Xi Jinping has called for an end to "disorderly price competition" and instructed ministries to stabilize the industry, though analysts remain skeptical about quick fixes given the scale of the downturn.