China’s Solar Slowdown Deepens as Weak Installations Pressure Prices
China’s solar installations remained in single-digit territory for a third consecutive month in May, as market-based power pricing weakened project economics and pushed domestic manufacturers to compete more aggressively for export sales, according to industry sources and the latest data from the National Energy Administration.
China added 8.68 gigawatts of solar capacity in May, down 8.8% from April and more than 90% from a year earlier. The additions lifted the country’s cumulative installed solar capacity to 1,261 GW.
New installations totaled 59.59 GW during January to May 2026, nearly 70% below the volume added during the same period last year.
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.
CPIA also expects global solar installations to reach 500 GW – 667 GW in 2026, compared with 580 GW in 2025.
To meet the lower end of CPIA’s domestic forecast, China would need to add an average of around 17 GW per month from June to December. Monthly additions would need to average almost 26 GW to reach the upper end.
Several market sources were skeptical that these targets could be achieved given the weak installation momentum seen during the first five months of this year.
However, one manufacturer source said installations could pick up towards the end of the year, as utility scale solar projects typically face grid connection deadlines by December.
The installation 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 projects from June 1, 2025.
Under the new framework, solar projects face greater exposure to market electricity prices, where prices are typically weakest during peak daytime generation hours. This makes it more difficult for project revenues to cover development costs and reduces developers’ incentive to commission new capacity.
“There was a major push to connect solar projects to the grid last year, but activity has slowed substantially this year, creating a huge disparity in installation volumes,” one industry source said. “Domestic manufacturers are definitely going through a crisis now,” the source added.
Export Pivot Adds Price Pressure
With domestic demand weakening, Chinese solar manufacturers have become increasingly aggressive in export markets as they seek to sustain sales and manage inventories, adding downward pressure to prices for overseas projects.
However, some international buyers have also held back from committing to purchases amid expectations that module prices could fall further.
One developer said weaker installations in China could lead to further inventory accumulation and looser supply conditions, reinforcing their expectations of price pressure through the remainder of the year.
Transaction levels across several export markets have moved lower in recent weeks, with some mainstream TOPCon module deals concluded in the low-$0.110 per watt peak range FOB China. This compares with traded levels of around %0.115/wp at the end of May, according to OPIS records.
However, some sources said China’s removal of export tax rebates for solar photovoltaic products from April 1 could weigh on export demand during the second half of 2026. Overseas buyers had accumulated substantial inventories in the first quarter ahead of the policy change, potentially reducing their near-term purchasing requirements.
OPIS assessed mainstream FOB China TOPCon module price at $0.113/wp on June 30, down 5% from the beginning of April, when the removal of export tax rebates took effect. Over the same period, domestic ex-works China TOPCon module prices fell more sharply, declining 8.6% to 0.735 yuan/wp.
—Reporting by Brian Ng, bng@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com