China’s June Solar Additions Up, But Demand Outlook Stays Weak
China added 12.48 gigawatts of solar capacity in June, up 43.8% from May, ending three consecutive months of single digit additions. However, the demand outlook is expected to remain weak through the rest of 2026 as government policies continue to push the solar industry toward more rational capacity expansion and production.
“The demand outlook for the second half of this year remains largely unchanged. I think the increase in installations reflects a high volume of module deliveries by state-owned enterprises for utility scale projects,” a tier-1 manufacturer source said.
The producer added that state-owned module tenders are typically more active in the first half of the year, supporting strong project installations in the second half.
Industry sources said installations could pick up towards year-end, as utility scale solar projects typically face grid connection deadlines in December.
Despite the month-on-month rebound, the 72.07 GW of new solar capacity installed in the first half of 2026 were down 66% from the same period last year. The additions lifted the country’s cumulative installed solar capacity to 1,274 GW.
The China Photovoltaic Industry Association or CPIA forecast in February that the country would install 180 GW – 240 GW in 2026, marking a decline of 24%-43% from the record 315.07 GW added in 2025.
To meet the lower end of CPIA’s domestic forecast, China would need to add an average of around 18 GW per month from July to December. Monthly additions would need to average almost 28 GW to reach the upper end.
Demand Tapers to “Rational” Levels
Speaking an industry symposium late last week, Wang Bohua, honorary chairman of the CPIA, said the adjustment in domestic installations showed positive signs that the market was returning to more rational levels.
Wang noted at the CPIA-organized event in Ningbo, Zhejiang that the 212GW installed in the first half of 2025 represented an unusually high comparison base, while the 72GW added in the first half of 2026 was more consistent with average installation levels recorded between 2021 and 2024.
Monthly installations in H1 2026 also showed the lowest volatility in nearly five years, according to CPIA. The more even distribution suggests that the market is shifting away from policy driven installation surges toward steadier deployment.
The slowdown has been widely attributed to China’s transition from guaranteed feed-in tariffs toward market-based electricity pricing under Policy No. 136, which took effect for new renewable projects from June 1, 2025.
Under the policy, solar projects are more exposed to market electricity prices, which are typically weakest during peak daytime generation hours, making it more challenging for project revenues to cover development costs and reduce incentive to commission new capacity.
A source at a top-10 manufacturer said declining module prices may also have supported the recent recovery in installations.
“Installations were too weak in the first quarter before volumes gradually recovered in the second quarter. With module prices falling, module demand may have returned to a more normal pace,” the producer said.
OPIS assessed EXW China TOPCon modules at 0.703 yuan per watt peak on May 21, equivalent to $0.110/wp on an FOB China basis, down 5.4% year to date.
—Reporting by Brian Ng, bng@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com