Wedoany.com Report-Aug. 17, China’s solar power capacity additions are expected to slow in the second half of 2025 due to reforms eliminating guaranteed pricing, creating uncertainty for new projects, according to industry sources. Despite this, the total annual installations are projected to reach a record high, driven by significant activity earlier in the year.

As of June 2025, China has introduced 212GW of new solar capacity.

By June, China added 212 gigawatts (GW) of new solar capacity, more than double the amount installed in the first half of 2024, as reported by the National Energy Administration. This rapid expansion reflects China’s position as the world’s leading solar market. However, analysts predict a sharp decline in the growth rate for the remainder of 2025. Natixis forecasts a total of 300 GW for the year, suggesting about 88 GW will be added after June. Similarly, Fitch Solutions’ BMI estimates up to 310 GW annually, implying an additional 98 GW by year-end. In contrast, the second half of 2024 saw 175 GW of new installations, contributing to a record 277 GW for that year.

The slowdown follows power sector reforms introduced in early 2025, which replaced fixed rates for renewable energy projects with market-based pricing. Projects launched after June must now navigate fluctuating electricity prices, introducing uncertainty for investors accustomed to stable returns. Linda Zeng, a senior analyst at BMI, noted: “All of the projects were rushing to be commissioned ahead of the last window where they have basically guaranteed revenue.” This led to a surge of 93 GW in May, followed by a drop to 14 GW in June, reflecting a rush to complete projects before the policy change.

The reforms, which vary by province, have prompted companies to frontload installations, contributing to the record first-half figures. However, monthly additions for the rest of 2025 are expected to stabilize at levels similar to June’s 14 GW. Zeng predicts that annual solar installations will settle at around 250 GW from 2026 onward, indicating a more balanced growth trajectory.

Global solar manufacturers, primarily based in China, face challenges from overcapacity, producing more than double the panels needed for 2025’s global demand. Additionally, the curtailment rate for solar power rose to 6.6% in the first half of 2025, up from 3.9% in 2024, highlighting grid integration issues. Despite these challenges, China’s solar sector continues to drive global renewable energy growth, with its first-half performance setting a strong foundation for the year.