Global solar installations to surpass 500 GW AC in 2025 before slowing

Cumulative photovoltaic capacity will still double in five years despite an expected slowdown.

Solar installations are seen to surpass 500 gigawatts (GW) AC by the end of 2025, driven largely by China, which accounts for more than half of global additions.

S&P Global said in its latest analysis that this marks an “extraordinary milestone” for the market after it recorded single-digit gigawatts just over a decade ago.

However, company experts “now forecast that China’s annual additions will fall from approximately 300 GW in 2025 to about 200 GW in 2026, a decline so steep that no other region will be able to compensate.”

A major policy shift in mid-2025 — from guaranteed pricing to competitive bidding — triggered a dramatic slowdown after an initial rush of installations. This led to a sharp drop in Chinese volumes in the second half of the year, creating intense price pressure and ultra-thin margins across the supply chain.

S&P Global said this anticipated contraction marks a turning point, with global solar additions expected to decline year over year. The reduction will be less than 10%.

“Over the next five years, cumulative photovoltaic capacity will still double, supported by emerging markets, diversification into storage and innovation in operations and maintenance,” S&P Global said.

Low prices of modules and solar power’s scalability will also unlock new markets.

However, the company warned about the impact of policy changes that can alter the outlook significantly.

“Whether the market declines or not, what is significant is our arrival at the point where we can start talking about a peak in global demand growth,” S&P Global said.