LONDON - Global photovoltaic installations are on track to reach 638 GW in 2026, according to new analysis from solar and storage technical advisory firm Intertek CEA, even as the industry braces for its first annual decline in nearly two decades.
The company's PV Supply, Technology and Policy Report for Q2 2026 projects a decline from last year's record installation figures before growth resumes toward 2030. According to the report, this year's downturn is driven entirely by China, which is facing market stagnation, while most other regions of the world are set to see either flat or accelerated growth.
Structural Oversupply Persists Across the Supply Chain
The report adds that structural oversupply is "severe and persistent" across the solar supply chain, with manufacturing capacity across all stages exceeding projected 2026 demand by wide margins. Polysilicon capacity stands at approximately 2,034 GW against 638 GW of installations, according to figures from the report, while module capacity of around 1,908 GW leaves an excess of more than 1.2 TW.
Despite the oversupply, Chinese module prices are set to continue rising in 2026 through to 2027, as suppliers "push for margin expansion and material cost passthrough." US module prices will remain elevated as the market "awaits clarity on the tariff structure likely to emerge from the polysilicon Section 232 investigation," while Indian module pricing through 2026 and 2027 will stay exposed to Chinese input costs.
From 2028 onwards, Intertek CEA expects prices to decline, citing market maturity and low but stable margins. The report adds that regionally-integrated production costs range from under $0.12/W to over $0.37/W, with US manufacturing subsidies narrowing the US-to-non-China cost gap to just $0.01 to $0.03/W. Indian cell and module assembly, as well as module assembly in the Southeast Asian market, is predicted to come within $0.01 to $0.03/W of Chinese prices "in time," but EU module assembly is forecast not to close its price gap with other markets.
A Historic Inflection Point for the Solar Industry
According to the 638 GW forecast, if the predictions are correct, 2026 may be considered a historic turning point for the solar industry. Analysts at Bloomberg New Energy Finance (BNEF) anticipate that in 2026, about 649 GW of new solar capacity will be installed, which represents a slight drop from the 655 GW expected to be installed in 2025; this means that 2026 will be marked as the very first time that there will be annual declines in solar installations since 2000. According to BNEF analyst Jenny Chase, the –0.9% year-on-year decrease in solar installations fits perfectly into the company's 10% margin of error, which corresponds to roughly 65 GW in terms of installed capacity.
SolarPower Europe projects a larger reduction in the global solar market with its Global Solar Market Outlook 2026-2030 suggesting will be weaker than expected and topping at just 612 GW under the Medium Scenario, which is 8% less compared to the record-breaking 664 GW set in 2025. According to its Low Scenario, the fall can amount to 25%. The last year was marked by record solar capacity installation of 664 GW which is a record for the industry and increased the overall solar capacity installed globally to over 3 TW.
The China Photovoltaic Industry Association (CPIA) has offered a wider range, estimating global solar installations in 2026 at 500–667 GW, with the Chinese market contributing 180–240 GW under general and optimistic scenarios respectively.
Regional Divergence Defines the Market
While the sluggishness of the Chinese market is causing a global slowdown, other large markets are demonstrating resilience. In Europe, modest growth of approximately 3% is expected in 2026, according to SolarPower Europe. In terms of solar capacity expansion, the United States is expected to achieve 49 gigawatts of new solar capacity, constituting 17% year-on-year growth, while India remains dynamic and has become an essential player in the global solar arena.
BNEF anticipates that 46 global markets will start operating more than a gigawatt of solar power capacity in 2026. In the long run, Intertek CEA is likely to see the trend towards global installations continuing through to 2030. BNEF projects the recovery rate will hit 688 gigawatts in 2027 and 743 gigawatts in 2028. SolarPower Europe expects almost the same amount as additions in 2027 and anticipates that they will reach 864 gigawatts in 2030.
Grid Infrastructure and Policy Challenges Loom
Despite the positive long-term outlook, developers are facing headwinds. Inadequate electricity grid infrastructure and evolving regulations are causing project delays in many countries. Companies are prioritizing storage-integrated projects to overcome transmission bottlenecks. Rising costs and trade restrictions are also directly impacting the pace of market expansion.
BNEF researchers indicate that while Chinese manufacturers will continue to maintain their global market share, new production facilities are gradually shifting to other regions. Analysts expect the industry to transition toward a more sustainable and balanced growth model in the coming years.
"The fundamentals of the global solar PV market will remain strong in 2026," Wood Mackenzie noted in its 2026 Solar PV Outlook, positioning solar as the "foundational technology of new power demand growth." The energy market analyst further estimates that US solar will expand by 65% over the next four years.
With cumulative global solar capacity already reaching approximately 2,800 GW by the end of 2025 - making it the technology with the largest installed capacity globally - the industry's long-term trajectory remains firmly upward. As Intertek CEA's Q2 2026 report makes clear, the 638 GW expected this year represents not a retreat, but a recalibration - one that sets the stage for renewed expansion later in the decade.
