China’s solar expansion is expected to slow in 2025 for the first time since 2019. China’s newly installed photovoltaic (PV) capacity in 2025 is forecasted to be between 215 and 255 gigawatts (GW), marking a decrease of approximately 8% to 23% from the record 277.57 GW added in 2024.

This otherwise anticipated contradiction contradicts how China’s solar expansion is expected to slow in 2025. This slowdown follows six consecutive years of expansion, with 2024 witnessing a 28.3% increase in new installations compared to the previous year.

Factors Contributing to the Slowdown

The substantial capacity additions in 2024 have set a high comparative base, naturally leading to a perceived slowdown in growth rates for 2025.

Market-oriented pricing reforms will be effective from June 1, 2025; China will transition from fixed feed-in tariffs to a market-driven pricing model for renewable energy. This shift requires new wind and solar projects to sell electricity through competitive bidding and market transactions, introducing revenue uncertainties for investors.

Policy implementation remains uncertain as local governments are in the process of detailing the execution of the new pricing policies. This leaves a lot of uncertainty and room for miscommunication without a detailed action plan. The lack of immediate clarity is causing a “wait-and-see” approach among developers and investors, potentially delaying new projects.

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Sustained Demand Drivers Amidst Policy Shifts

Despite the anticipated slowdown in capacity expansion, sectors such as electric vehicles, data centers, and 5G networks are driving increased electricity demand, which is expected to support ongoing growth in solar energy utilization. These emerging industries demand much green fueling energy consumption and the development of the sustainable sector.

While China’s domestic expansion may decelerate, global renewable energy trends are projected to continue rising in 2025, with emerging markets like the Middle East contributing to this growth.

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