China’s Solar Growth to Slow Amid Rising Overseas Demand: Industry Body

The China Photovoltaic Industry Association or CPIA expects domestic solar installations to undergo a short-term correction in 2026, while overseas demand continues to grow steadily in the long run.

While China added a record 316.57 gigawatts of solar capacity in 2025, CPIA forecasts installations will fall by 24%-43% this year to between 180GW and 240GW.

China’s module manufacturing capacity and production stood at 1,089.4GW and 574.5GW respectively, down 5.8% and 8.4% year on year, respectively. The declines indicate that the industry’s supply-demand structure is undergoing a significant restructuring, the association said.

The five largest manufacturers increased their share of domestic module production by 0.8 percentage points to 48.2% in 2025. However, their share of production capacity fell by six percentage points to 37.8%.

Meanwhile, the top 10 manufacturers combined production share declined by two percentage points to 64.3%, while their share of total capacity fell by 9.1 percentage points to 51.7%.

China Tightens Capacity and Quality Controls

CPIA said the year-on-year decline in China’s module capacity and production has helped curb irrational price competition. However, supply continues to exceed demand, keeping prices at low levels.

Under China’s 15th Five-Year Plan, regulators have proposed measures to curb “involution-style” competition through tighter capacity controls, industry standards, price enforcement and quality supervision.

CPIA said the introduction of mandatory national standards will further raise technological upgrades across the solar manufacturing sector. These include minimum energy-efficiency requirements for crystalline silicon modules and inverters, module safety standards and requirements on product nameplate markings.

Together with stricter energy consumption standards for polysilicon and monocrystalline silicon production, the measures are expected to encourage the phase-out of less efficient capacity and support the adoption of higher performance technologies.

Module power output continued to rise in 2025 as N-type cell technologies were combined with larger format wafers. Modules exceeding 800 watt-peak have now been launched by all tier-1 manufacturers, according to CPIA.

Further efficiency gains in N-type technologies, including Tunnel Oxide Passivated Contact, heterojunction and back-contact cells, are expected to raise module output higher.

CPIA also expects the module market to become increasingly segmented by application, raising the importance of product differentiation. Manufacturers are developing tailored products for specific end-user requirements.

These include lightweight, anti-dust, self-cleaning and anti-glare modules, as well as products designed for petrol stations, offshore and marine installations, deserts and harsh climates.

Export Markets Face Higher Trade Barriers, Localization Rules

The U.S. market remains highly exposed to policy shifts, with successive tariff measures escalating trade barriers and creating uncertainty.

CPIA said the country’s One Big Beautiful Bill Act and the imposition of anti-dumping measures on Southeast Asian imports have prompted Chinese manufacturers to pursue a new wave of overseas capacity expansion. Target markets include the Middle East and Africa, particularly Egypt, Oman, Ethiopia and Tunisia.

In Europe, the Industry Accelerator Act proposed in March signals a shift in policy direction, with measures aimed at limiting the expansion of Chinese manufacturing capacity in the region.

India is also tightening localization requirements. Upgrades to the Approved List of Models and Manufacturers mandate the use of domestically manufactured cells, encouraging producers to move beyond module assembly and establish localized cell manufacturing supply chains.

While Europe has entered a more mature stage of solar development, demand from the Asia Pacific and other emerging markets continues to grow steadily, CPIA said.

Global module capacity reached 1,430.2GW in 2025, up 3% year on year, while production fell 4.4% to 693.6GW, according to the association. Global capacity expansion slowed further compared with 2024, while module production recorded its first annual decline.

—Reporting by Brian Ng, bng@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com