The global solar PV industry is approaching a critical turning point, with 2026 expected to represent the cyclical low point and the start of a broad restructuring phase, according to the latest report from InfoLink. After several years of aggressive capacity expansion, the sector is now grappling with accumulated risks, persistent overcapacity and mounting cost pressures.
During 2025, the industry continued to post headline growth, but structural imbalances that built up during the previous two years became increasingly visible. Price competition intensified across the value chain, prompting companies to pursue coordinated communication and self-regulation strategies aimed at stabilising prices and restoring more sustainable market conditions.
As the market enters 2026, conditions have become more challenging. A sharp rise in silver prices has pushed up cell and module production costs, while tighter production discipline across the industry has added upward pressure to supply chain pricing. Against this backdrop, the central theme for the year is no longer expansion, but control. Managing inventory levels, protecting cash flow and maintaining minimum profit thresholds have become the primary tests for manufacturers.
At the same time, de-globalisation trends continue to gather pace. Companies are increasingly focused on reshaping supply chain footprints, strengthening bargaining power and accelerating localisation in markets outside China, particularly in Asia, the Middle East, Africa and India.
Demand outlook points to short term contraction
Global demand trends in 2025 were marked by strong regional divergence. In China, growth slowed as the current Five Year Plan period neared completion and most provinces achieved their installation targets. New policy measures governing distributed solar also contributed to a more cautious pace of project development.
European demand remained largely flat under the pressure of policy uncertainty and macroeconomic headwinds. India stood out as a relative bright spot, supported by resilient domestic demand and localisation initiatives. By contrast, the United States underperformed earlier expectations, while Brazil saw demand weaken due to policy related constraints. Overall global module demand in 2025 is estimated at between 653 and 706 gigawatts direct current.
Looking ahead, InfoLink forecasts that 2026 will be the first year of negative growth in global PV demand in more than ten years, with module demand expected to decline to between 529 and 624 gigawatts direct current. The contraction is largely driven by pullbacks in core markets such as China and the United States. Europe is expected to maintain steady development, but without delivering significant incremental growth.
Despite this near term downturn, the long term outlook for solar remains robust. PV continues to be one of the most cost competitive renewable energy technologies, with rising module power ratings and improving solar plus storage economics. Structural demand drivers such as electrification in emerging markets, replacement of ageing assets and energy supply for data centres are expected to support a return to stable growth beyond the trough.
Supply chain under pressure from overcapacity and rising costs
Across the supply chain, overcapacity remains a defining challenge. Polysilicon output in 2025 is estimated at around 726 gigawatts equivalent, with average utilisation rates of only about 44 percent. Despite some production adjustments, effective overcapacity persisted, partly due to low seasonal electricity costs that reduced the urgency of output cuts.
Midstream wafer producers responded by tightening production schedules, while cell manufacturers came under increasing pressure from both upstream costs and downstream pricing resistance. The surge in silver prices has particularly affected cell margins, leading to production cuts and temporary shutdowns toward the end of 2025 and into early 2026.
Module manufacturing has increasingly shifted to a demand driven model. After several years of margin erosion, leading vertically integrated players are prioritising profit protection over volume growth. Orders priced below full cost are being treated with greater caution, and production planning has become more conservative.
Inventory levels remain a key risk for 2026. According to InfoLink, polysilicon inventories in early 2026 reached the equivalent of up to 316 gigawatts. If output discipline weakens, the market could face renewed price pressure. In the near term, prices are expected to remain volatile at relatively low levels, with movements closely tied to inventory drawdowns and compliance with production controls.
Localisation reshapes global manufacturing
Outside China, supply chain dynamics are evolving rapidly. Southeast Asian capacity is being reassessed in response to trade measures in the United States, while India is emerging as a major manufacturing hub. By the end of 2025, Indian module nameplate capacity had reached 122 gigawatts, while United States domestic module capacity stood at 73 gigawatts.
As a result, the contribution of non-China manufacturing to global PV output is expected to rise significantly during 2026. However, policy changes, including export tax adjustments and local content requirements, are likely to introduce periods of supply tightness and volatility in key markets.
Quality and cost discipline define the next phase
InfoLink concludes that 2026 will mark a decisive shift from a race for volume to quality driven survival. The recovery of supply chain health will depend on strict production discipline, faster inventory clearance and the successful rollout of localised manufacturing outside China.
In an environment of high cost volatility and policy uncertainty, a company’s ability to manage quality, costs and cash flow will become more important than shipment rankings. For the global solar PV industry, the coming year may be painful, but it is also laying the foundation for a more balanced and sustainable growth cycle.
Author: Bryan Groenendaal






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