China is on course for a historic milestone in its energy transition, with solar power expected to surpass coal as the country’s largest source of installed electricity generation capacity before the end of 2026. The development reflects Beijing’s accelerating commitment to renewable energy while signalling a strategic shift away from rapid expansion towards improving efficiency, quality and the long-term value of clean energy as it works to achieve its 2030 carbon-peak target.
China is expected to see solar power overtake coal as its largest source of installed electricity generation capacity this year, marking a significant turning point in the country’s energy transition as policymakers increasingly prioritise renewable energy while placing greater emphasis on quality and efficiency over rapid expansion.
Total installed solar capacity reached 1.27 billion kilowatts (kW) by the end of June and was projected to exceed coal capacity before the end of the year, according to state-run People’s Daily, which cited figures from the China Photovoltaic Industry Association (CPIA). The milestone reflects the continued rapid growth of solar energy as Beijing advances its long-term strategy to reduce reliance on fossil fuels and expand renewable energy generation.
Solar electricity production also recorded strong momentum during the first half of 2026, rising by more than 40 per cent compared with the same period last year. During midday heatwaves, solar generation supplied one-third of peak electricity demand, underlining its growing role in supporting the country’s electricity system during periods of high consumption.
The changing energy mix was also reflected in broader generation data. According to the latest figures released by the National Energy Administration (NEA), coal-fired power accounted for less than half of China’s total electricity generation for the first time on record during the first six months of the year. Coal-fired output totalled 2.5 trillion kilowatt-hours during the period, highlighting the increasing contribution of renewable sources to the national power supply.
The expansion of solar energy forms part of Beijing’s wider climate and energy strategy aimed at meeting its 2030 carbon-peak goal. Under a renewable energy road map released last week, total installed solar and wind power capacity is projected to exceed 2.8 million kW by 2030, rising from 1.84 million kW in 2025. According to the plan, renewable energy would account for more than half of China’s total installed electricity generation capacity and produce 30 per cent of total electricity output by the end of the decade.
While maintaining ambitious renewable energy targets, Chinese authorities have also stressed that future growth must focus on improving system reliability rather than simply adding new capacity. An explanation issued by the National Development and Reform Commission, the country’s top economic planner, said renewable energy development would increasingly prioritise providing a more “reliable replacement” for fossil fuels. Achieving that objective would require improvements across power generation, grid transmission and end-use efficiency, alongside a transition from expansion driven by scale towards greater economic value.
The emphasis on higher-quality development comes as China’s solar manufacturing industry adjusts after several years of rapid expansion. Intense price competition has placed sustained pressure on manufacturers, prompting Beijing to strengthen industrial discipline while continuing broad policy support for renewable deployment.
The pace of new solar installations slowed considerably during the first half of 2026. NEA data released last week showed newly installed solar panel capacity fell by 66 per cent year on year to approximately 72 gigawatts (GW), compared with 212.21GW during the same period a year earlier.
Speaking at a CPIA event last week, former secretary general Wang Bohua said the decline suggested the industry was returning to a more rational pace after what he described as “abnormal” levels of expansion last year. In a further effort to stabilise the sector, the CPIA published cost-calculation guidelines on Monday aimed at verifying compliance and preventing below-cost selling. The framework was developed under the guidance of the State Administration for Market Regulation and the Ministry of Industry and Information Technology.
Industry observers say the sector is now entering a new stage of development. Shen Xinyi, senior adviser at the Centre for Research on Energy and Clean Air think tank, said China’s solar industry had moved beyond an era of rapid capacity expansion towards one focused on efficiency, value addition and wider applications. She described solar power as a “vital pillar” of low-carbon electricity and said China’s comprehensive industrial supply chain continued to lower clean energy costs while strengthening energy security. At the same time, she cautioned that the intermittent nature of solar generation required coordinated support from energy storage, flexible coal-fired power plants and wind energy, adding that the sector’s next challenge would centre on improving grid absorption and creating greater value through multiple applications.
