What's Happening?
Global solar installations are projected to surpass 500 gigawatts (GW) AC by the end of 2025, driven primarily by China, which accounts for more than half of the global additions. This milestone marks
significant growth from single-digit gigawatts recorded just over a decade ago. However, a major policy shift in mid-2025 from guaranteed pricing to competitive bidding in China has led to a dramatic slowdown in installations, with annual additions expected to fall from approximately 300 GW in 2025 to about 200 GW in 2026. This decline is anticipated to create intense price pressure and ultra-thin margins across the supply chain.
Why It's Important?
The anticipated slowdown in solar installations, particularly in China, marks a turning point for the global solar market. While cumulative photovoltaic capacity is expected to double over the next five years, the reduction in annual additions could impact global supply chains and pricing structures. Emerging markets and innovations in storage and operations may help sustain growth, but the shift in policy highlights the vulnerability of the solar industry to regulatory changes. This development underscores the need for diversification and adaptation in the renewable energy sector to maintain momentum and address potential challenges.
