Amid major policy shifts, next year will see the first-ever decline in annual solar power capacity installations, following the weakest growth in seven years in 2025, according to BNEF’s Global PV Market Outlook.
Developers are set to add globally a total of 649 gigawatts (GW) of solar power capacity in 2026, which would be a slight drop compared to this year’s additions expected at 655 GW, the outlook showed on Tuesday.
“The solar industry is entering a low-growth phase after years of rapid expansion,” analysts at BNEF wrote, attributing the decline to policy shifts in major solar markets such as China and the United States.
Growth in other markets will not be able to offset the slowdown in the biggest solar markets and two largest economies in the world, according to BNEF.
Global solar power additions are set to rebound in 2027, with 688 GW of new solar capacity expected then.
However, next year will be the year of adjustment to new policy and market realities in the U.S. and China.
In China, a new renewables pricing mechanism alarmed investors earlier this year. Following booming solar and wind installations in the first half of 2025, China introduced a new renewable pricing mechanism, which removed a guaranteed rate of return. This led to a slump in Chinese solar installations in the summer months. In addition, China has enacted stricter controls on the bloated solar manufacturing capacity that has created price wars and massive losses for companies.
“After the breakneck addition of 264 GW of wind and solar in the first 6 months, the renewable development will switch to a more sustainable growth pattern, focusing on quality over quantity, which is the key tone of the 15th Five Year Plan,” Sharon Feng, senior analyst, China power market at Wood Mackenzie, said last month.
In the United States, the Trump Administration’s hostile policy toward clean energy has created many uncertainties going forward.
Last month, an analysis by the Solar Energy Industries Association (SEIA) showed that the political attacks on America’s solar and storage industry are threatening as many as 519 projects totaling 117 GW of capacity. These projects represent half of all new planned power capacity in the United States, and 17 states could lose over half of all their planned capacity, SEIA said.
By Tsvetana Paraskova for Oilprice.com
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