Installation Growth Slows Significantly as Industry Enters Adjustment Phase
After years of rapid expansion, China’s solar industry experienced a marked slowdown in growth during the first half of 2026. The latest data released by the National Energy Administration (NEA) shows that newly installed solar capacity in the first six months of the year reached 72.07 GW, bringing the country’s total photovoltaic capacity to 1.27 terawatts. While the overall capacity continues to grow, the pace has slowed significantly compared to the same period last year, signaling structural adjustment pressures within the industry.
Data indicates that solar installations in China during January and February 2026 fell by more than 17% year-on-year. The NEA reported that solar power generation in the first half of the year reached 655.5 billion kilowatt-hours, with an average utilization rate of 91.4%. By the end of June, China’s wind and solar power capacities stood at 679 GW and 1.27 TW, respectively, accounting for nearly half of the country’s total installed power generation capacity and serving as a cornerstone of its energy transition.
Market-Based Electricity Pricing Reshapes Development Logic
Starting in 2026, China has gradually phased out fixed feed-in tariffs for new renewable energy projects, shifting entirely to a market-based trading mechanism. NEA data shows that the volume of electricity traded in the national power market reached 3.685 trillion kilowatt-hours in the first half of the year, a 24.2% increase from the previous year. This shift has profoundly impacted the business models of solar developers, with project siting, grid connection timing, and grid absorption capacity becoming critical factors in determining economic viability.
Industry insiders note that under the market-based pricing mechanism, developers are no longer solely focused on expanding installed capacity but are instead prioritizing the actual profitability of projects. Due to the intermittent nature of wind and solar power, grid absorption pressures have continued to rise, driving rapid development in energy storage systems. By the end of June, China’s newly added energy storage capacity reached 153 GW (396 GWh), a 61% year-on-year increase, becoming a key tool for balancing grid supply and demand.