China’s solar market is more dynamic than doomsayers predict

After annual solar installations in China reached another record in 2025, some observers paint a bleak outlook for the world’s largest PV market in the coming years. The doomsayers overlook the bigger, long-term picture, argues Johannes Bernreuter.

Commentary by Johannes Bernreuter, Head of Bernreuter Research

I am not an in-depth expert for the solar PV market in China, but I remain optimistic about its future prospects. Maybe not so much for PV installations in 2026 as the 44% year-over-year slump of the volume in December 2025 (see chart above) is a clear damper on expectations.

However, I don’t give much on the projection that annual Chinese installations will not exceed the 2025 volume of 315 GW_AC (378 GW_DC, measured by the direct current power of installed solar modules) through 2030 or even beyond. This projection from the “majority of market observers” cited by Frank Haugwitz, Director of the Asia Europe Clean Energy (Solar) Advisory Company, seems to reflect the typical conservative bias of the mainstream.

Although it is almost sure that growth rates will decline in a maturing PV market like China, I rely more on an old saying: History doesn’t repeat itself, but it often rhymes.

Since China became the world’s largest PV market in 2013, it has experienced strongly fluctuating growth rates (between 13.5% and 148%) and one downturn (in 2018/2019). It took four years until the record installation in 2017 (53 GW) was surpassed in 2021 (54 GW).

An average annual growth rate of 13.3% is not unachievable

The medium scenario of the China Photovoltaic Industry Association (CPIA) assumes new PV installations of 220 GW_AC in 2026, which Haugwitz deems realistic. In order to get from there to 320 GW_AC in 2029 (exceeding 315 GW within four years from 2025), an average annual growth rate of 13.3% would be required between 2027 and 2029. That would be almost the same rate as in 2025 (13.5%), but starting from a significantly lower base than the 278 GW_AC in 2024.

Achieving the same growth rate as in 2025 may appear challenging after 2026, but remember that the Chinese PV market has seen such low rates only three times since 2013: 15% in 2014, 14% in 2021 and 13.5% in 2025. Apart from the downturn in 2018/2019, all other annual growth rates through 2023 were above 46%, the rate in 2024 was still 28%.

As I said, future growth will be slower than in the past. Nevertheless, a compound annual growth rate of 13.3% is not unachievable: Starting from 220 GW in 2026, it would mean annual installations of 250 GW in 2027, 282 GW in 2028 and 320 GW in 2029.

I still regard this as a conservative scenario. Other market researchers like Bloomberg New Energy Finance (BNEF) project 273 GW_AC already for 2026. BNEF’s prediction for 2025 was very close to the actual result, whereas CPIA has a long track record of underestimating Chinese PV installations in its forecasts.

The Chinese PV market has been dynamic for 20 years now, driven by the agility of its players (and, of course, by incentives). I don’t believe we have to wait until 2031 or even longer before we will see annual installations in the order of 315 GW_AC again – even in a conservative scenario.