China’s photovoltaic industry entered a broad contraction in the first half of 2026, with production falling across every major manufacturing segment and domestic installations declining sharply from last year’s exceptional base, according to the China Photovoltaic Industry Association (CPIA).
New solar installations reached 72.07 GW in the first half, down about 66% from 212.21 GW a year earlier. The comparison was distorted by a rush to connect projects before China introduced market based pricing for new renewable energy projects in June 2025.
The association kept its forecast of 180 GW to 240 GW of new solar capacity for the full year, compared with about 315 GW in 2025. Even at the upper end, 2026 would mark China’s first annual installation decline since 2019.
Exports offered some support. China exported $17.18 billion worth of wafers, cells and modules in the first half, up 24.3% year on year. Cell exports rose 36.8%, while module export volumes slipped 2.5%. Africa increased its share of Chinese module exports, reflecting a gradual diversification beyond established European markets.
CPIA expects global PV additions to fall 8% to 612 GW in 2026, with China’s policy shift accounting for much of the decline. Grid congestion, curtailment and negative electricity prices are also slowing project development in several international markets. The association expects global growth to resume from 2027, with annual additions reaching 864 GW by 2030.
The downturn is also accelerating structural change. Yao Yao, chief new energy analyst at Sinolink Securities, said the bottom for supply chain prices and overall profitability had essentially been reached. He said electricity market reforms in provinces such as Gansu and Yunnan were helping solar tariffs stabilise and recover, improving project returns.
Yao added that new consumption models, including direct links between green electricity and computing and data storage centres, together with wider use of energy storage, could help domestic demand recover strongly by 2027.
The first half nevertheless brought heavy losses across the sector. Preliminary reports indicate that 21 listed solar companies expect combined first half losses of between 13 billion yuan and 16.8 billion yuan, or $1.8 billion to $2.3 billion. Major players including face pressure from supply demand imbalances, lower operating rates and trade barriers.
Liu Yiyang, executive secretary general of CPIA, said the year on year declines in polysilicon, wafers, cells and modules signalled that a turnaround was approaching. He urged the industry to move away from competing on scale and price and instead focus on technology, quality and differentiated advantages.
Three mandatory national standards covering solar energy consumption and manufacturing efficiency will take effect on Jan 1, 2027. Analysts expect the tougher requirements to push about 20% to 30% of outdated capacity out of the market, speeding up consolidation.
Author: Bryan Groenendaal






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