Hidden positive trend behind the weak solar demand in China
Pessimistic views on China’s solar market development in 2026 are distorted by the anomaly of the exorbitant installation rally in 2025. A comparison with the installations in 2024 provides a better picture.
When market participants speak of weak solar demand, they mostly do so in a situation of oversupply, especially in China. Not rarely is the actual demand higher than insinuated.
No doubt: Since China introduced a new, market-based remuneration system for electricity from PV power plants in June 2025, solar installation volumes in the country have fallen drastically – not only year over year (YoY – blue curve in the chart above), but even compared to the corresponding period in the year before last (2023/2024 – pink curve).
Nevertheless, a positive trend is developing underneath the surface: While quarterly installations from the third quarter of 2025 through the first quarter of 2026 were below the level reached in the previous two years, the rate of decline has continuously become smaller.
If one looks more closely at the first quarter, however, the positive trend reverses strikingly from a diminished year-over year decline by 17.7% in January/February 2026 (due to the Chinese New Year holidays, the National Energy Administration traditionally reports the aggregate volume of the first two months of the year) to a massive drop by 56% in March.
This plunge is not surprising, though. In March 2025, the month of comparison, an exorbitant installation rally started ahead of the system change in June, which culminated in a monthly installation volume of 93 GWAC in May. The year-over-year growth rates from March through May were 124%, 215% and 388%, respectively.
Chinese solar installations of more than 270 GWAC in 2026 are realistic
To avoid a picture distorted by the statistical anomaly of the installation rally in 2025, it makes much more sense to compare the development in 2026 with the installations in 2024. And here, the positive trend continues: The rate of decline versus 2024 narrowed from 11.5% in January/February to only 1.2% in March.
If this trend stabilizes, the installation volume in April 2026 could already exceed that of April 2024. Remember: Annual Chinese installations in 2024 were 277 GWAC, only 12% below the record volume of 315 GWAC in 2025.
However, there is a big hurdle for matching the 2024 volume in 2026: Installations in December 2024 were almost three times as high as the volume in November, whereas installations in December 2025 did not even double those of November.
In order to reach the annual volume of 2024, installations from April through November 2026 will thus have to exceed the corresponding monthly volumes in 2024 to compensate for the massive jump in December 2024.
There are good chances that this scenario will come true: According to data provider OPIS, the tender results of Chinese state-owned enterprises for the procurement of solar modules in March totaled 67.5 GW, more than double the 29.9 GW procured a year ago.
Hence, Bloomberg New Energy Finance’s 2026 installation forecast of 273 GWAC for China is at least plausible; it may even be surpassed.
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