Solar Power Projects Face Decline Over Policy Shifts in 2026

Global solar power installations are expected to record their first annual decline in 2026, signalling a slowdown after years of rapid expansion, according to BloombergNEF’s (BNEF) Global PV Market Outlook.

The report indicates that developers worldwide are projected to add about 649 gigawatts (GW) of solar capacity in 2026, slightly below the 655 GW expected this year. If realised, this would mark the first drop in annual solar additions, following what BNEF described as the weakest growth in seven years in 2025.

Analysts at BNEF said the solar industry is entering a low-growth phase, largely driven by major policy shifts in key markets, particularly China and the United States. They noted that growth in other regions will be insufficient to offset the slowdown in the world’s two largest solar markets and biggest economies.

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While global additions are forecast to recover in 2027, with new capacity expected to rise to about 688 GW, BNEF described 2026 as a year of adjustment to new policy and market realities in both China and the US.

In China, investor confidence was shaken earlier this year following the introduction of a new renewables pricing mechanism that removed guaranteed rates of return. This came after a surge in solar and wind installations in the first half of 2025.

The policy change contributed to a sharp slowdown in solar installations during the summer, alongside tighter government controls on excess manufacturing capacity that had fuelled price wars and heavy losses across the sector.

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Commenting on the shift, Sharon Feng, senior analyst for China power markets at Wood Mackenzie, said renewable development in China is moving away from breakneck expansion towards a more sustainable growth pattern, with greater emphasis on quality rather than quantity under the country’s 15th Five-Year Plan.

In the United States, uncertainty has been heightened by policy hostility towards clean energy under the Trump Administration.

An analysis by the Solar Energy Industries Association (SEIA) warned last month that political attacks on the solar and storage sector are putting up to 519 projects at risk, representing about 117 GW of capacity.

According to SEIA, the threatened projects account for roughly half of all planned new power capacity in the US, with as many as 17 states at risk of losing over half of their expected capacity additions, underscoring the scale of the challenge facing the industry.