China’s Solar Capacity Growth to Decelerate in H2 2025

China’s solar power capacity expansion is set to experience a slowdown in the second half of 2025. This shift follows recent reforms that have removed guaranteed pricing, creating uncertainty for new projects. Despite this anticipated deceleration, analysts predict that total additions for the year will reach a record high, largely due to significant frontloading in the first half.

According to data from the National Energy Administration, China has already added 212 gigawatts of new solar capacity through June 2025. This figure represents more than double the capacity added during the same period in 2024. The strong performance in the first half of the year is expected to help offset the anticipated decline in new installations later on.

Market Dynamics and Global Context

The recent reforms in China have led to concerns among investors about the future of solar projects. The elimination of guaranteed pricing means that new ventures will now face greater market risks. According to an estimate from Morningstar, global solar manufacturers, the majority of which are based in China, have the capacity to produce more than twice the number of solar panels that the world is expected to purchase this year.

This oversupply could lead to increased competition among manufacturers and pressure on prices. The dynamics within the Chinese solar market serve as a microcosm of the challenges facing the global renewable energy sector, as countries grapple with balancing growth and sustainability.

Analysts anticipate that while the second half of 2025 may see reduced capacity additions, the groundwork laid in the first half will bolster overall performance for the year. The anticipated record-high capacity additions underscore China’s dominant position in the solar industry, which has been pivotal in driving down costs globally.

Future Outlook

Looking ahead, the solar industry in China will need to adapt to the new pricing landscape. Companies may need to innovate and find efficiencies to remain competitive in an evolving market. The uncertainty created by the removal of guaranteed pricing could also prompt a reevaluation of investment strategies among developers and stakeholders.

As the world shifts towards renewable energy sources, China’s ability to navigate these changes will be closely watched. The country is not only a leader in solar manufacturing but also a significant player in global energy trends. The outcomes of these reforms will have far-reaching implications for the solar sector both domestically and internationally.

In summary, while China’s solar power capacity growth may decelerate in the latter half of 2025 due to new pricing reforms, the sector continues to show resilience. The record additions in the first half of the year reflect strong momentum, even as the industry prepares for a changing landscape.