The "official" tone has been set, is the photovoltaic industry in 2025 truly in danger?!

The Photovoltaic Association predicts a decline in China's newly installed photovoltaic capacity in 2025. So, what can the photovoltaic industry expect in 2025?

 01 The Photovoltaic Association predicts a decline in new domestic installations in 2025`

The difficult year 2024 for the photovoltaic industry has passed. What will 2025 bring? This has naturally become a question pondered by photovoltaic professionals and the entire industry chain. To address this, on February 27th, the Photovoltaic Association held a seminar on the review of the development of the photovoltaic industry in 2024 and the outlook for 2025.

According to the statistical data released at the meeting, China's newly installed photovoltaic capacity in 2024 reached 277.57GW, a year-on-year increase of 28.3%, and the cumulative installed capacity of photovoltaic power in China exceeded 880GW (gigawatts); during the same period, global newly installed photovoltaic capacity was approximately 530GW, a year-on-year increase of approximately 35.9%.

According to Wang Bohua, honorary chairman of the Photovoltaic Association, the rapid growth of installed capacity was the biggest highlight of the photovoltaic industry in 2024, exceeding everyone's expectations.

In addition, the Photovoltaic Association's "2024-2025 China Photovoltaic Industry Development Roadmap" predicts that China's newly installed photovoltaic power generation capacity in 2025 will be between 215-255GW, and the growth rate in the next five years will be significantly lower than the high growth rate since 2019.

This predicted data means that, compared to the installed capacity of over 277GW in 2024,China's photovoltaic installations will decline in 2025.

In this regard, Wang Bohua added that due to the impact of policies such as the "Management Measures for Distributed Photovoltaic Power Generation" and the market-oriented reform of new energy grid-connected electricity prices, as well as the time difference between the above policies and the specific implementation measures of various provinces, there is a certain wait-and-see mood in the industry. Therefore, there is uncertainty in the expectation of China's newly installed photovoltaic capacity in 2025.

Furthermore, he also stated that although the photovoltaic industry had a difficult 2024, and it is expected that new domestic installations will decline in 2025, the Chinese photovoltaic market will still maintain high growth, with strong policy support for the fundamentals of growth. Wind and solar power bases are less affected by new policies, and the overall social electricity demand is still steadily increasing, with the process of greening social electricity consumption continuing to advance. Moreover, continuous technological advancements in the photovoltaic industry chain can drive the industry to explore more application scenarios.

For the global photovoltaic market, the Photovoltaic Association predicts that there will be a total of 531-583GW of new photovoltaic installations in 2025; in an optimistic scenario, year-on-year growth will be 10%. Demand growth in emerging markets is faster, with rapid development in regions such as Latin America and the Middle East.

Although the Photovoltaic Association's prediction for new domestic installations in 2025 has disappointed many industry players and media outlets, those who have been long-time observers of the new energy sector should not be surprised. We have previously analyzed the situation of the photovoltaic industry in 2025, and the expectation for new domestic installations in 2025 is relatively low.

Moreover,Based on the predictions of many domestic and international institutions, the overall outlook for the growth rate of new installations in China and the world in 2025 is not optimistic.

Of course, not all institutions are pessimistic. There are also optimistic predictions. For example, Bloomberg New Energy Finance believes that under a moderate scenario, global new photovoltaic installations in 2025 are expected to grow by 17%, and China's new installations in 2025 will reach 302GW, still representing a certain growth compared to 2024.

However, regardless of whether the predictions are optimistic or pessimistic, it is generally agreed that the growth of global new photovoltaic installations will not be as rapid as before. In this case, whether there is an expectation gap in the photovoltaic industry in 2025 is a crucial question, determining the opportunities for the photovoltaic industry in the secondary market.

 02 Where is the expectation gap in the photovoltaic industry in 2025?

In terms of demand, the expectation gap for new photovoltaic installations in 2025 is relatively small, especially in the domestic market. It can even be said that if it does not decline, it would already be considered an overachievement. The expectation gap mainly depends on the performance of foreign markets, particularly whether emerging markets can perform beyond expectations. If not, the demand side of the global market in 2025 is likely to be lower than expected.

Actually, judging from the predictions of many institutions before the year, there are no overly high expectations for photovoltaic demand in 2025. In contrast, expectations for the supply side are relatively higher, especially among domestic institutions.

Undeniably, the biggest problem facing the photovoltaic industry right now is severe overcapacity. Policymakers and the industry chain (for example, the Photovoltaic Association is leading industry self-discipline) hope to solve this problem, which is also where many people think there may be overachievement.

However, unlike other media outlets, we have lower expectations. In the absence of sufficient market competition, the pace of capacity clearing is likely to be much slower than expected, and we are even more pessimistic after seeing a set of data recently.

According to publicly available online information, after entering 2025, more than 10 provinces have already issued lists of provincial key projects, involving photovoltaic manufacturing projects with a total investment exceeding 200 billion yuan and a total capacity exceeding 300GW.

Of course, some of these projects may have already been included in the project statistics of previous years, but even if the overlapping part is deducted, the number of new production capacities in 2025 is not small!

Why, even though everyone knows that the photovoltaic industry has experienced serious overcapacity, the entire industry is suffering huge losses and accumulating debts, are there still so many new projects?

Actually, the root problem has been mentioned many times before. The crux of the matter lies with local governments.

The combination of local governments' needs for Investment and the fundraising needs of photovoltaic companies often leads to inevitable choices. This also includes many upgrades and replacements of backward production capacity. For example, many photovoltaic companies have become deeply bound to local governments, having already invested tens of billions. If they do not build new production capacity, it means that previous investments will be completely wasted. Burning money might still give them a chance to outlast their competitors, ushering in a new cycle and recouping costs. Considering local employment issues, local governments often have no choice but to continue providing blood transfusions and protection.

Under such circumstances, it is difficult to expect the photovoltaic supply side to perform beyond expectations. The only thing worth looking forward to is whether the comprehensive entry of new energy can accelerate the separation of the deep-binding relationship between photovoltaic companies and local governments. Only if this aspect shows exceeding expectations can the supply side hope to have an expectation gap. This requires further observation.

To be honest, in terms of fundamentals, the photovoltaic industry in 2025 is unlikely to have a significant expectation gap. If it does not continue to worsen, it would already be considered an overachievement, but this does not mean that there is no expectation gap in the secondary market.

 03 The expectation gap may lie in the secondary market`

The biggest discrepancy in expectations in the secondary market of the photovoltaic industry lies in the fact that the market is pessimistic enough about the photovoltaic industry, and the photovoltaic sector is low enough!

After the downturn in the past two or three years, the bubble in the photovoltaic sector has basically been squeezed out. The photovoltaic sector is now at a sufficiently low level. If this round of global revaluation bull market for Chinese assets continues, then new energy, as a very important emerging industry in China, will also have the opportunity to win the favor of the capital market; at least, a low-level speculation is not a problem.

Not to mention if we really want to talk about AI, new energy is not impossible to connect with. This point has been analyzed before in "New Energy Front"AI's end is PhotovoltaicThe above is no longer elaborated.

If saying that the end point of AI is Photovoltaic is difficult for the market to accept, then Photovoltaic as one of the important Applications of AI is completely reasonable. For example, large models represented by ds can provide performance optimization suggestions by analyzing equipment operation data, such as adjusting the angle of photovoltaic panels and optimizing the blade angle of wind turbines, thereby improving power generation efficiency.

Alternatively, by analyzing historical meteorological data and equipment operation data, it is possible to predict the photovoltaic and wind power generation in a certain period of time in the future, helping grid scheduling and energy management. Or, by analyzing equipment operation data, predict potential equipment failures, conduct proactive maintenance, reduce downtime and repair costs.

Previously, in response to the peak-off-peak problem between new energy power generation and electricity consumption, the power generation of photovoltaic and wind power is intelligently scheduled through real-time power generation data and electricity demand, optimizing energy allocation and improving energy utilization efficiency to better solve the absorption problem. Similarly, the charging and discharging strategies of the energy storage system can be optimized by analyzing the fluctuations in power generation and electricity consumption, improving the efficiency and lifespan of the energy storage system.

These are all areas where AI can play a role in the future, and they are also areas that the industry is gradually undertaking. AI has a catalytic effect on any industry, and new energy is naturally one of the indispensable industries.

The biggest advantage of new energy is that the industry is currently at a sufficiently low level, and it is safer than other sectors. Maybe one day the wind will blow to the new energy sector.