China’s April Solar Installations Stay Weak as Policy Shift Deters Demand
China’s domestic solar demand remained muted in April, with installation volumes staying in single-digit territory for a second month this year, as weakened project economics, lower market-based power prices and firmer module costs continued to weigh on market activity, according to industry sources and the latest data from the National Energy Administration.
April’s installation figure showed only a modest 6.8% improvement from the 8.91 gigawatts installed in March, but this was down around 79% from a year earlier.
Between January and April this year, China installed 50.91GW of solar capacity, roughly half of the volume recorded over the same period last year.
Market analysts said the weak year-to-date installation figures were unsurprising, given China’s transition away from guaranteed feed-in tariffs toward market-based electricity pricing, alongside persistently high grid curtailment rates.
From the perspective of solar developers, project profitability has come under pressure since China shifted to a market-based electricity pricing model on June 1, 2025 under Policy No. 136, replacing the previous guaranteed feed-in tariff mechanism.
Industry sources noted that market-based electricity pricing has kept power prices lower than under the previous feed-in tariff model, making it more difficult for project returns to cover financing costs. As such, investors have largely stayed away from financing new solar projects.
In some regions, such as Shandong and Sichuan, electricity oversupply has even pushed power prices into negative territory during peak generation hours. This has further discouraged developers from pursuing new solar projects, as the returns may no longer justify the capital costs.
Beyond electricity prices, market sources told OPIS that higher module costs have also contributed to the weaker installation momentum in China. Higher silver prices have been a main driver of higher cell production costs, lifting cell prices and translating into firmer downstream module prices.
OPIS assessed mainstream ex-works China TOPCon modules at 0.749 yuan ($0.07) per watt peak on May 26, 2026, up 15.8% from last June, when market-based electricity pricing took effect.
—Reporting by Brian Ng, bng@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com