China’s solar power market is set for a slowdown in the second half of 2025 as government reforms removing guaranteed pricing for renewable energy projects create uncertainty for new installations, Reuters reports. Despite this, full-year additions are expected to reach record highs due to frontloading earlier in the year, analysts say.
Through June 2025, China added 212 gigawatts (GW) of new solar capacity, more than double the first-half 2024 levels, according to the National Energy Administration (NEA). However, forecasts suggest that new capacity additions in the second half of the year could drop sharply, reflecting cautious investor sentiment in response to recent policy changes, the report said.
Analysts at Natixis estimate total new solar capacity for 2025 will reach 300 GW, implying only 88 GW of installations for the remainder of the year. Similarly, Fitch Solutions’ BMI forecasts 310 GW for the year, with just 98 GW expected in the second half. By comparison, 175 GW of solar capacity was added in the second half of 2024, contributing to a record annual gain of 277 GW.
The slowdown is driven by reforms that removed guaranteed rates of return for renewable energy projects. From June 2025, solar developers must sell power at market prices, creating uncertainty for investors accustomed to fixed returns. Provincial differences in market mechanisms have added further complexity.
As a result, many developers rushed to complete projects in the first half of the year, with NEA data showing 93 GW of installations in May 2025 but only 14 GW in June. “All of the projects were rushing to be commissioned ahead of the last window where they had basically guaranteed revenue,” said Linda Zeng, senior power and renewables analyst at BMI.
Despite the second-half slowdown, annual additions are still expected to surpass previous records due to the massive first-half surge. From 2026 onward, solar installations in China are projected to stabilize around 250 GW per year, signaling a maturing phase for the world’s largest solar market.
China’s solar manufacturing sector, already facing overcapacity and price pressures, will closely watch these developments, as policy uncertainty and global demand dynamics continue to influence market growth.
GreentechLead.com News Desk