Solar demand in China slightly recovers after slump in spring

A very weak second quarter interrupted the previous trend of recovery in Chinese PV installations. In June, however, a silver lining appeared on the horizon.

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).

In April 2026, however, Bernreuter Research revealed a hidden positive trend behind the weak solar demand in China: 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 became continuously smaller.

We also argued that it makes more sense to compare the development since mid-2025 with the corresponding months two years ago in 2023/2024 because the year-over-year comparison in 2026 is distorted by the statistical anomaly of the exorbitant installation rally from March through May 2025. The result: In March 2026 the rate of decline of Chinese PV installations had narrowed to only 1.2 % versus March 2024.

But this positive trend was interrupted in the second quarter of 2026, especially in April and May. Installations in these two months only hovered around the March level of close to 9 GW_AC, whereas in 2024 the monthly volume grew from 9 GW_AC in March to 19 GW_AC in May. Thus, installations in May 2026 fell back by 54.4% behind the level in May 2024.

The weak second quarter has made 270 GW_AC in 2026 highly unlikely

Only in June 2026 did a silver lining appear on the horizon: New installations increased by 43.8% month over month to 12.48 GW_AC; this value, however, is still 46.5% below the 23.33 GW_AC installed in June 2024.

For July 2026, market researcher InfoLink expects that Chinese solar module production will grow by 4 GW to 5 GW as demand from ground-mounted PV projects in China is gradually picking up. Hence, installations in July might rise by 4.5 GW_AC to 17 GW_AC, which would reduce the gap between July 2026 and July 2024 to less than 20%.

In any case, the very weak second quarter has made our previous expectation obsolete that Chinese PV installations of 270 GW_AC are possible in 2026. Assuming a continuation of the cautious recovery in the second half of the year, we now land at annual installations of 220 GW_AC, equivalent to the medium scenario of the China Photovoltaic Industry Association.

Should the recovery accelerate and/or installations in November and especially December run very strong, a volume of 250 GW_AC is still conceivable. At the moment, however, such a scale appears pretty optimistic.