Global manufacturing capacity across every segment of the solar value chain remains severely overbuilt relative to near-term demand, said the latest PV Supply Technology, and Policy Report from Intertek CEA.
While global installations are projected to reach 638 GW in 2026, polysilicon manufacturing capacity is set to hit approximately 2,034 GW, and module capacity is projected at 1,908 GW, leaving a supply of more than 1.2 TW above global installation demand.
U.S. installations are forecast to remain flat annually through 2030 as domestic buyers navigate persistent policy risks and regulatory unknowns. The global slowdown in 2026 is driven primarily by China, where domestic deployment has dropped sharply following the phase-out of grid subsidies and a lack of immediate demand drivers.
Year-to-date monthly installation data in China shows steep year-over-year drops, including a 56% decline in March, 79% in April, and 91% in May compared to 2025 levels. Meanwhile, Indian deployment is surging as developers rush projects online ahead of the Approved List of Models and Manufacturers (ALMM) List II domestic cell mandate effective June 1, 2026.
Trade risks
Importing components into the U.S. market has become significantly riskier following a wave of parallel trade actions initiated throughout the second quarter, said Intertek CEA. Preliminary determinations under the Solar 4 investigations set combined duty rates exceeding 100% on cells and modules originating from India, Indonesia, and Laos, with preliminary countervailing duties taking effect July 12, 2026.
Furthermore, new Anti-Circumvention cases targeting exports from Ethiopia and South Korea introduce retroactive duty liability for active supply chains. U.S. procurement teams also face potential forced labor Section 301 tariffs ranging from 10.0% to 12.5% across 59 countries.
Supply security risks are also emerging on the export side, with direct ramifications for U.S. equipment and component supply chains. On April 7, 2026, China’s State Council published the nation’s first comprehensive supply chain security regulation, signed by Premier Li Qiang.
The regulation establishes explicit authority for multi-ministerial countermeasures against foreign trade restrictions, including potential export limits on critical raw materials, manufacturing technologies, equipment, and completed products. While Beijing has not yet enacted formal PV export bans, potential equipment restrictions could slow non-China cell and ingot manufacturing expansion plans by forcing suppliers to rely on legacy equipment.
Multilateral trade friction is escalating as well, said the report. In May 2026, India blocked China’s request for a dispute settlement panel at the World Trade Organization regarding India’s basic customs duties and ALMM rules. If these trade disputes escalate, China could leverage its new supply chain security regulation to restrict PV equipment or raw material exports to India, further disrupting non-China supply chains intended for U.S. imports.
Technology trends
At the module technology level, manufacturers are aggressively pursuing efficiency gains to differentiate products amid global market oversupply.
As TOPCon maintains its dominance, cell makers are moving from half-cut and triple-cut designs to quad-cut cells compatible with G12 (210 mm) wafers. Because internal electrical power loss is proportional to the square of the current, splitting a cell into four pieces reduces internal power loss to 1/16 of a full cell. However, smaller cell pieces increase micro-crack risks and require additional welding points, leading to higher manufacturing costs.
High-power perovskite tandem modules debuted at recent trade events, though commercial mass-production timelines remain unconfirmed, said the report.
The Interek CEA report noted a shift , the 2026 Shanghai SNEC Expo featured more battery storage displays than PV exhibits for the first time in the event’s history.
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