Official announcements indicate that the photovoltaic industry in 2025 might face challenges!

The Photovoltaic Association predicts a decline in China's new photovoltaic installations in 2025. What can the photovoltaic industry expect in 2025?

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

With the difficult year of 2024 behind the photovoltaic industry, the question of what 2025 holds is on the minds of industry professionals and the entire supply chain. On February 27th, the Photovoltaic Association held a seminar reviewing the development of the photovoltaic industry in 2024 and looking ahead to 2025.

According to the released data, China's new photovoltaic installations in 2024 reached 277.57GW, a year-on-year increase of 28.3%, with cumulative installations exceeding 880GW (gigawatts). Globally, new installations were approximately 530GW, a year-on-year increase of approximately 35.9%.

According to Wang Bohua, Honorary Chairman of the Photovoltaic Association, the rapid growth in installed capacity was the biggest highlight of 2024, exceeding all expectations.

Furthermore, the Photovoltaic Association's "2024-2025 China Photovoltaic Industry Development Roadmap" predicts that China's new photovoltaic power installations in 2025 will be between 215-255GW, and the growth rate over the next five years will be significantly lower than the high growth rate since 2019.

This prediction means that, China's photovoltaic installations will decline in 2025 compared to over 277GW in 2024.

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 release of these policies and the specific implementation measures of various provinces, there is a wait-and-see attitude in the industry. Therefore, there is uncertainty in the expectation of new photovoltaic installations in China in 2025.

Furthermore, he stated that although 2024 was difficult for the photovoltaic industry, and a decline in new installations is expected in 2025, the Chinese photovoltaic market will still maintain high growth. The fundamentals of growth are still strongly supported by policies, projects such as large-scale wind and photovoltaic power bases are less affected by new policies, and the overall social electricity demand is still steadily growing, with the process of greening social electricity consumption continuing. Moreover, continuous technological advancements in the photovoltaic industry chain can help the industry explore more application scenarios.

For the global photovoltaic market, the Photovoltaic Association predicts new photovoltaic installations totaling 531-583GW in 2025; in an optimistic scenario, this represents a year-on-year growth of 10%. Emerging markets such as Latin America and the Middle East are experiencing rapid growth.

Although the Photovoltaic Association's prediction for new domestic installations in 2025 has disappointed many industry professionals and media, those familiar with the renewable energy sector shouldn't be too surprised. Previous analyses of the photovoltaic industry in 2025 already pointed to lower expectations for new domestic installations.

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

Of course, not all institutions are pessimistic. Some predictions are optimistic, such as Bloomberg New Energy Finance, which believes that under a medium scenario, global new photovoltaic installations in 2025 are expected to grow by 17%, and China's new installations will reach 302GW, still showing growth compared to 2024.

However, whether the predictions are optimistic or pessimistic, there is a general consensus that the growth rate of global photovoltaic installations will not be as rapid as before. In this case, whether there will be an expectation gap in the photovoltaic industry in 2025 is a crucial issue, 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 could even be said that if the number doesn't decline, it would be considered a positive surprise. Some expectation gap may exist in the foreign market, particularly whether emerging markets can perform better than expected. If not, the demand side of the global market in 2025 will likely be lower than expected.

In fact, predictions from many institutions before the beginning of the year did not have high expectations for photovoltaic demand in 2025. Relatively speaking, the expectations for the supply side were higher, especially among domestic institutions.

Undeniably, the biggest problem facing the photovoltaic industry is severe overcapacity. Policymakers and the industry chain (for example, the Photovoltaic Association is leading industry self-discipline) hope to solve this problem, and this is where many people see potential for positive surprises.

However, unlike other media, we have lower expectations. In the absence of full market competition, the pace of capacity reduction may be much slower than expected, and this pessimism has been reinforced by recent data.

According to publicly available online information, as of 2025, more than 10 provinces have issued lists of provincial key projects. These involve 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. However, even after deducting this overlapping part, the figure for new capacity in 2025 is still significant!

Why are so many new projects being added when it's widely known that the photovoltaic industry is experiencing severe overcapacity, with widespread losses and heavy debt?

The root cause has been discussed many times before. The problem lies with local governments.

The combination of local governments' need for investment attraction and photovoltaic companies' need for fundraising often leaves little choice. This includes upgrading and replacing outdated production capacities. Many photovoltaic companies have deep ties with local governments, having invested billions. Failure to add new capacity means writing off previous investments. Continued investment offers a chance to outlast competitors and recover costs. Considering local employment issues, local governments are often forced to continue providing financial support.

Under these circumstances, expecting the photovoltaic supply side to perform beyond expectations is difficult. The only thing worth looking forward to is whether the full-scale entry of new energy sources can accelerate the decoupling of the deep-binding relationship between photovoltaic companies and local governments. Only if this aspect shows unexpected improvement can the supply side have an expectation gap. This needs further observation.

To be honest, in terms of fundamentals, the photovoltaic industry in 2025 is unlikely to have a significant expectation gap. Avoiding further deterioration would be considered a positive surprise. However, this does not mean that there is no expectation gap in the secondary market.

03 Expectation gap may exist in the secondary market

The biggest expectation gap in the secondary market of the photovoltaic industry lies in the market's sufficiently pessimistic outlook for the photovoltaic industry and the relatively low position of the photovoltaic sector!

After two or three years of decline, 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 of Chinese assets continues, then new energy, as a very important emerging industry in China, will also have the opportunity to gain favor from the capital market, at least a low-level speculative hype is not a problem.

Not to mention, if you really want to talk about AI, new energy is not impossible to connect. This was previously analyzed by New Energy in the article " The End of AI is Photovoltaics ", and I will not elaborate further.

While saying that the end point of AI is photovoltaics is difficult for the market to accept, photovoltaics as one of the important application fields 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, assisting power grid scheduling and energy management. Or by analyzing equipment operation data, it is possible to predict potential equipment failures, perform maintenance in advance, reduce downtime, and reduce maintenance costs.

Previously, addressing the peak-shaving problem between new energy generation and electricity consumption, by using real-time power generation data and electricity demand, intelligently scheduling the power generation of photovoltaics and wind power, optimizing energy allocation, improving energy utilization efficiency, and better solving the problem of consumption.

These are all areas where AI can play a role in the future, and it is what the industry is gradually doing. 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 the security is higher compared to other sectors. Maybe one day the wind will blow to the new energy sector.