Views: 0 Author: Site Editor Publish Time: 2026-07-28 Origin: Site
July 2026 witnessed a cluster of landmark developments in China’s photovoltaic (PV) industry, including new policy releases, official installation data updates and authoritative industry assessments. The rollout of detailed mandatory national standards for PV energy consumption and efficiency, the release of H1 domestic installation statistics, and the official issuance of the 15th Five-Year Plan for Renewable Energy Development, together with industrial seminar consensus, jointly signal a fundamental shift in the sector. China’s PV industry has fully exited the previous extensive scale expansion era and entered a brand-new development phase featured by capacity clearance, standard upgrading, structural optimization and efficiency-driven high-quality growth.
According to data released by the National Energy Administration, China’s newly installed PV capacity reached 72.07 GW in the first half of 2026, a year-on-year decline of 66.04%. In June alone, new installations stood at 12.48 GW, narrowing the year-on-year drop to 13.09%. While the sharp decline has triggered market concerns over shrinking industry demand, the downward fluctuation represents a rational correction after excessive front-loaded installation activities rather than a fundamental collapse of market demand, with distinct phased characteristics.
The core driver of this adjustment is the policy-driven installation boom in 2025. In February 2025, the National Development and Reform Commission and the National Energy Administration set June 1, 2025 as the cutoff date for classifying new and existing renewable energy projects. All grid-connected projects after the cutoff were fully incorporated into the market-oriented power trading system. The clear policy window triggered a nationwide grid-connection rush. Domestic PV new installations surged to 45.22 GW in April 2025 and hit a record monthly high of 92.92 GW in May, totaling 138 GW within two months. Such concentrated installation activities substantially pulled forward market demand that would have been fulfilled in 2026.
After excluding the base distortion caused by the abnormal installation frenzy in Q2 2025, the 2026 H1 installation volume, though lower than the 102.48 GW recorded in the same period of 2024, does not indicate a cliff-like downturn. Mainstream industry judgments suggest that the current slowdown is essentially a cyclical transition from ultra-high-speed expansion to steady and rational growth, while the underlying logic of renewable energy substitution and long-term market demand fundamentals remain intact.
Nevertheless, short-term operational pressures are tangible. The entire PV industrial chain is facing persistent price pressure, with module spot prices falling below RMB 0.7/W and cutthroat price competition continuing across the sector. After years of continuous capacity expansion, all links in the industrial chain maintain excessive production capacity. The overall module capacity has exceeded 1,100 GW, far outpacing current market absorption capacity. The core industry contradiction has transformed from insufficient market demand into structural imbalances, including mismatched excessive capacity expansion versus effective market demand and a surplus of low-efficiency capacity alongside insufficient high-end supply, making in-depth industrial reshuffling inevitable.
Compared with short-term installation volatility, the three mandatory national standards for PV energy consumption and efficiency publicly released by the Ministry of Industry and Information Technology on July 20 serve as a long-term core policy reshaping industrial competition rules. The industry has bid farewell to the model of market-dominated spontaneous reshuffling and ushered in a new capacity clearance era driven by both policy standards and market competition.
Covering core industrial segments including polysilicon, monocrystalline silicon, PV modules and inverters, the three mandatory national standards set rigid market access thresholds for unit product energy consumption and energy efficiency. The official standards will take full effect on January 1, 2027. Products failing to meet the minimum energy efficiency values will be prohibited from production, sales, import and project bidding, while production lines and capacities that fail energy consumption requirements will be phased out of the market.
The upgraded standards precisely target the root cause of industry homogenized competition. During the previous extensive expansion stage, massive high-energy-consumption and low-efficiency backward capacities sustained market competition through low-price strategies, exacerbating supply-demand imbalance and vicious price wars and hindering industrial technological iteration and high-quality development. By raising market access barriers from the dual dimensions of energy consumption and efficiency, the new standards realize a precise shift from eliminating backward technical routes to phasing out backward products and inefficient production capacity.
In the polysilicon segment, further tightened energy consumption requirements mean that less than half of China’s existing polysilicon capacity can meet the new standards, according to industry estimates. Capacities without technological upgrading will be completely eliminated after 2027. For PV modules, conversion efficiency is for the first time mandatorily linked to market access, with clear minimum efficiency benchmarks set for mainstream technical routes including TOPCon, HJT and BC, forcing accelerated technological upgrading across the industry. The MIIT explicitly stated that the new standards will guide the orderly exit of high-energy-consumption and low-efficiency capacities and continuously optimize the supply structure of the PV industrial chain.
The policy rollout marks a fundamental reform of industrial competition logic. The era of extensive capacity expansion has come to an end, and technological efficiency and product quality have become core survival thresholds for PV enterprises.
Short-term capacity clearance and industrial adjustment do not undermine the long-term growth fundamentals of the PV industry. Officially released on July 23, the 15th Five-Year Plan for Renewable Energy Development clarifies the development goals and implementation paths for the new energy sector from 2026 to 2030, confirming that the PV industry is not entering a stock competition stage but embracing a new cycle of structural incremental growth.
The Plan targets a total installed renewable energy capacity of approximately 3.5 billion kilowatts by 2030, among which the combined installed capacity of wind and solar power will exceed 2.8 billion kilowatts, accounting for over 50% of the total renewable energy capacity. By the end of 2025, China’s cumulative installed wind and solar capacity reached around 1.84 billion kilowatts, indicating nearly 1 billion kilowatts of new incremental space during the 15th Five-Year period with strong long-term development certainty.
Beyond ample incremental potential, the industry’s demand structure will witness comprehensive restructuring. Past growth relied heavily on large-scale centralized ground power stations, while future growth will be driven by diversified and scenario-based new application systems. On the one hand, large-scale wind-solar bases in desert, gobi and arid regions will act as the core growth engine. The Plan proposes adding over 370 million kilowatts of new wind and solar capacity in the Three-North Region to leverage superior northwest natural resources and build large-scale new energy supply bases. On the other hand, distributed PV, integrated hydro-wind-solar projects, power-data coordination and offshore new energy will become critical supports for future industry growth.
The divergence between short-term installation decline and long-term capacity expansion essentially reflects the iterative upgrading of industrial development models. The rapid scale expansion of the PV industry in previous years accumulated prominent problems including overcapacity and homogenized competition. The ongoing industrial adjustment serves to eliminate inefficient and invalid capacity, repair supply-demand balance, and lay a solid foundation for a new round of high-quality growth.
Guided by updated policies, restructured supply-demand patterns and long-term national planning, the PV industry will follow a clear three-stage development cycle in the next few years, with a complete reshaping of core competition logic.
In the short term, the industry will continue digesting excessive capacity and clearing inefficient production resources. Overcapacity accumulated during years of rapid expansion will keep suppressing product prices, and vicious price competition will not ease in the near term. Low-efficiency and technologically backward capacities will accelerate their exit, driving continuous improvement in industrial concentration.
In the medium term, industrial competition dimensions will be fully upgraded. The extensive competition model centered on capacity expansion, cost reduction and speed will be completely replaced. Technological iteration capability, product energy efficiency, power system adaptation and customized scenario solution capabilities will become core enterprise competitiveness. Enterprises capable of adapting to large-scale new energy bases, distributed energy systems and the new power system will continuously capture market shares.
In the long term, the PV industry maintains solid growth fundamentals. Supported by the carbon peaking and carbon neutrality strategy and the 15th Five-Year Plan, solar power will consolidate its position as a dominant new energy source. The ongoing industrial reshuffling does not signal the end of industry dividends, but represents a necessary process to eliminate low-end invalid supply, rebuild industrial value and unlock high-quality growth.
China’s PV industry is currently at a critical turning point between the old and new development cycles. Short-term installation adjustments and capacity clearance are inevitable for industrial self-innovation and upgrading. Driven by standardized supply regulation via mandatory national standards, expanded long-term incremental space via top-level planning and diversified new application scenarios, the PV industry will completely step out of homogenized low-end competition. It will evolve into a high-quality development stage featuring advanced technology, premium capacity, balanced supply and demand, and enhanced industrial value, with industry growth shifting from scale-oriented dividends to technology and quality-oriented dividends.
