Currently, predicting the new photovoltaic (PV) capacity additions in China is quite challenging. Various institutions have significantly underestimated PV forecasts from 2016 to 2023, while projections for 2024 have been overly optimistic. There is considerable uncertainty for 2025, and a cautious optimism prevails; achieving results similar to 2024 would be a positive outcome.
On March 20, during the Bloomberg New Energy Finance summit in Beijing, Zhang Haimeng, Vice President of Longi Green Energy, made these remarks during a panel discussion.
The release of two key policies—“Management Measures for the Development and Construction of Distributed Photovoltaic Power Generation” and “Notice on Deepening the Market-oriented Reform of On-grid Electricity Prices for New Energy to Promote High-quality Development” (referred to as Document 136)—has continued to influence industry trends and demand forecasts. The predictions for this year’s new PV capacity additions in China have become a hot topic at various forums.
According to Zhu Daocheng, President of JA Solar Technology, domestic demand may decrease by 10-20% this year. However, the final outcomes will be closely tied to how market-oriented transactions are executed across different provinces. “In summary, a decline is a high-probability event,” he stated.
Zhao Wei, Senior Vice President of Sungrow Power Supply, pointed out that, in addition to Document 136, the current state of China’s grid construction poses greater limitations, especially in regions like Northwest China, where there is a notable curtailment of solar power. Even if previously accumulated projects materialize, they may not proceed as originally scheduled due to these constraints. He also predicts that this year, the Chinese PV market will likely remain flat or experience a slight decline.
In February, the China Photovoltaic Industry Association forecasted that new PV installations in China would reach between 215 and 255 GW in 2025, reflecting a year-on-year decline of 8.13% to 22.54%.
Meanwhile, Bloomberg New Energy Finance maintains a positive outlook for growth in the Chinese market. Zhao Tianyi, an analyst for energy transition at Bloomberg, indicated during the conference that this year’s demand growth in the Chinese market is projected to slow to 9%, reaching 302 GW, with corresponding direct current side demand around 368 GW.
After the release of the two major policies at the beginning of the year, it is anticipated that centralized incremental capacity will reach 177 GW, marking an 11% year-on-year increase. The introduction of Document 136 is expected to act as a catalyst for centralized reserve projects.
According to Bloomberg’s database, there are still 280 GW of centralized PV projects under construction that have yet to connect to the grid from 2022 to 2024. This substantial reserve capacity will support installation efforts this year.
Zhao Tianyi also noted that from a regional perspective, Document 136 is likely to stimulate markets in areas where renewable energy penetration is still low.
“Due to Document 136, demand in the commercial market surged in the first half of the year, leading to a significant increase in spot prices for modules,” Zhao Tianyi explained. Unlike centralized projects, commercial projects tend to be smaller in scale, operate at lower voltage levels, have shorter construction cycles, and exhibit less sensitivity to changes in module prices. Therefore, during this rush for installations, they have a competitive edge over centralized projects.
The commercial sector is a vital component of distributed solar energy, alongside residential solar energy systems.
“Overall, promoting commercial PV projects is essentially returning commercial solar to its two core attributes: commercial viability and local consumption,” Zhao Tianyi emphasized. The future focus will be on identifying reputable entities with stable electricity demands and targeting regions with higher electricity prices as critical for investing in new commercial PV projects.
The introduction of these two new policies has triggered a “rush for installations” in the PV market during the first half of the year, resulting in a continued increase in module prices for over a month.
Zhang Haimeng commented that companies currently prefer stable product prices. The recent price increases are not considered normal events, and predicting future price fluctuations is challenging. Companies can only manage their internal variables effectively, such as production planning, client communication, and inventory levels, to minimize disruptions.
Zhu Daocheng mentioned that the industry is gradually undergoing a capacity clearing process. Throughout this phase, all manufacturing companies are reluctant to incur losses and aim to secure market share during the final stages. Leading enterprises and upstream stakeholders should maintain a unified understanding and approach market fluctuations rationally.
While Zhang Haimeng is not overly optimistic about the current market clearing situation, he believes the industry’s “cash-burning” phase is nearing an end. As a result, companies are unlikely to offer irrationally low quotes, though balancing supply and demand will take some time.
Bloomberg’s PV analyst Tan Youru shares a similarly cautious perspective on the competitive landscape. “Looking at price trends for 2024 and the first half of 2025, companies have prolonged the competitive cycle through production cuts, but we have not seen much capacity clearance during this period,” Tan noted. He highlighted that PV firms are facing severe homogeneity competition, and the clearance process is more prolonged than expected, with no significant mergers or acquisitions observed. Therefore, the entire PV sector’s bottom cycle may last longer, and companies will continue to face price challenges within the supply chain.
This year also marks the conclusion of the “14th Five-Year Plan.” By the end of 2024, ten provinces and regions in China have yet to meet their installed capacity targets set in the plan.
Globally, PV demand growth is also experiencing a gradual slowdown. Bloomberg pointed out that this is partly due to traditional major markets facing increasing development bottlenecks, leading to declining yield expectations and reduced attractiveness for PV project investments. Furthermore, emerging markets are showing limited overall growth, unable to compensate for the decline in traditional markets.
Bloomberg predicts that global PV capacity additions will reach approximately 700 GW in 2025, reflecting a 17% year-on-year increase.
During the aforementioned roundtable, Zhang Haimeng expressed optimism about the development potential of the Indonesian market, hoping it could become a new energy export hub. Both executives from Sungrow and JA Solar highlighted the Middle East as a key area of interest.
Zhao Wei noted that the Middle East is striving to reduce its reliance on oil and possesses significant renewable energy potential, particularly in solar energy. While the development of this market has been relatively slow, achieving a balance from a commercial perspective is essential. Since last year, the decline in solar costs has made it highly profitable.
Zhu Daocheng disclosed that JA Solar has also secured several large projects in the Middle East and will focus on this market going forward. He also suggested that attention should be given to the future development opportunities in Africa.
The highly discussed Document 136 will also have a profound impact on the energy storage industry.
Zhao Wei indicated that the market will witness more value from virtual power plants in the future. Document 136 has opened up broader possibilities for flexible energy storage applications. With the integration of solar, storage, and load management through digital means, these systems can genuinely participate in grid regulation and become integral to the grid. Additionally, the support for grid construction highlights the unique value of energy storage in stabilizing and ensuring reliability in the entire grid.
Zhou Xiangning, a storage analyst at Bloomberg, predicts that new energy storage installations may see a slight decline this year. This is primarily because each province’s capacity targets have already been achieved or are close to being met ahead of schedule by the end of 2024, which may limit installation volumes for 2025. Furthermore, the excess capacity beyond the targets is relatively limited in the absence of economic viability.
Regarding whether comprehensive energy storage requirements will be completely abolished and whether new policies will be extended to all aspects of new energy development, Zhou Xiangning stated that specific implementation details from each province are still awaited, which will be gradually released by the end of this year.
Zhou Xiangning estimates that by 2025, China’s new energy storage installations will reach 79 GWh, with a fivefold increase to 466 GWh projected by 2035.
