China’s solar sector is on a record-breaking trajectory that is poised to reshape the global energy landscape. Recent data and projections from Rystad Energy suggest that China will soon dominate the solar power market, with capacity exceeding 1 terawatt (TW) by 2026. This ambitious growth represents a significant leap from the 500 gigawatts (GW) milestone that is expected to be reached by the end of 2023. China’s solar journey, which began over a decade ago, is marked by a steady ascent. The 500 GW mark, to be achieved in 2023, signifies a remarkable milestone in a 13-year journey. However, the pace of expansion is set to accelerate even further, with projections indicating that China’s total installed solar photovoltaic (PV) capacity will skyrocket to 1,000 GW by the end of 2026.
The anticipated surge in new solar capacity for 2023 is staggering, with expectations that it will surpass 150 GW, nearly doubling the 87 GW installed in 2022. This meteoric rise is projected to continue unabated, with an estimated 165 GW in new capacity to be added in 2024 and another 170 GW in 2025. These numbers translate into China’s cumulative solar PV capacity exceeding 700 GW by 2024, surging to nearly 900 GW by the close of 2025, and finally breaching the momentous 1 TW mark in 2026.
The significance of China’s solar achievements is not confined to its borders. Currently, China’s 500 GW represents approximately 40% of the global solar capacity, firmly establishing it as the global leader. In contrast, the United States, the second-largest solar market, accounts for roughly 12% of global capacity, with 145 GW installed. While the U.S. is also projected to witness growth, spurred by incentives under the Inflation Reduction Act, its total capacity is estimated to reach 209 GW by 2026, constituting around 11% of the global total.
The surge in solar capacity is not just a testament to China’s commitment to renewable energy; it also reflects substantial investments. According to the National Energy Administration (NEA), approximately 134.9 billion CNY (approximately $15.8 billion) were invested in solar PV construction during the first half of 2023. Remarkably, this investment outpaces thermal power construction by a factor of 3.4, marking the highest among all power generation sources. Addressing the challenge of solar intermittency, China has proactively promoted the development of utility-scale renewable projects equipped with associated storage solutions. Pumped hydro, a promising technology for managing seasonal energy demand fluctuations, is rapidly gaining ground in China. As of June 2023, the country had 49 GW of pumped hydro capacity, with projections indicating it will reach 64 GW by 2025 and a remarkable 120 GW by 2030.
Yicong Zhu, Senior Renewables and Power Analyst at Rystad Energy highlighted China’s commitment to solar expansion, stating, “China’s national program to build out solar capacity, launched in June 2021, has led to a significant boost in large-scale projects. Although most distributed PV systems are installed on rooftops, not all of them are used for residential purposes. Around two-thirds of the distributed PV capacity in China is utilized by the commercial and industrial sectors and these projects can vary from tens to more than 100 MW.”
China’s strategic approach to solar energy includes a focus on distributed solar energy, primarily installed on rooftops. This approach has gained momentum, especially in densely populated areas where land availability and costs for large-scale utility solar PV projects are prohibitive. Notably, provinces such as Henan, Shandong, Hubei, Jiangsu, and Zhejiang have witnessed a surge in distributed solar installations.
Among these provinces, Henan leads the pack, with 7.6 GW of new solar PV installations, of which 98% were distributed solar PV systems. Shandong closely follows with 6.8 GW of new installations. Shandong also boasts the highest installed solar PV capacity among the provinces, totaling 49.5 GW, comprising 35.7 GW of distributed solar and 13.7 GW of utility-scale solar. Hebei secures second place in installed solar PV capacity, with a cumulative total of 41.7 GW, evenly split between utility-scale and distributed solar PV installations.
China’s provincial-specific solar PV installation targets, part of its 14th five-year planning period, aim to install 443 GW of new capacity by the end of 2025. As of June 30, a commendable 206 GW was already installed, representing a completion rate of 46.5% at the halfway mark of the five-year plan.
However, progress has been uneven across provinces. While Henan and Fujian have surpassed their targets for the planning period, nearly half of the 26 provinces have fallen behind, with less than 20% of their five-year targets achieved. This underscores the need for accelerated project development, particularly in provinces such as Shanxi, Inner Mongolia, Gansu, and Qinghai, which have yet to install more than 20 GW of new capacity.
In conclusion, China’s remarkable surge in solar capacity is poised to reshape the global energy landscape, with projections indicating a total capacity exceeding 1 terawatt by 2026. This growth is driven by substantial investments, proactive measures to address solar intermittency and a strategic focus on distributed solar energy. As China continues to lead the charge in the renewable energy sector, its progress serves as a beacon for nations worldwide seeking to transition to clean, sustainable energy sources.
