CN-STR
Solar panels and wind turbines in Lingwu in China's northern Ningxia region.

China's solar fleet is now larger than its coal fleet for the first time in the country's history. The milestone comes in the same year that new solar construction has plunged by nearly 70%.

The National Energy Administration announced the milestone on September 1, using data it had released on August 25. Installed solar capacity reached 1.286 billion kilowatts by the end of July, narrowly surpassing coal's 1.285 billion kilowatts to become China's largest source of power-generation capacity. Solar now accounts for 31.5% of the country's total installed capacity of 4.08 billion kilowatts, up from 26.4% just two years ago. It generated 802.4 billion kilowatt-hours in the first seven months of 2026, a 15.5% increase from a year earlier and equivalent to about 13% of national electricity consumption — roughly one in every eight kilowatt-hours used nationwide.

The growth has been rapid. Solar capacity stood at about 250 million kilowatts at the end of 2020. By the end of 2025, it had exceeded 1.2 billion kilowatts — a fivefold increase in five years.

But the milestone masks the fact that the industry driving this growth has just sharply slowed down. New solar installations totalled 59.59 gigawatts in the first five months of 2026, down almost 70% from the same period a year earlier. Developers had rushed to connect projects before a May 2025 deadline linked to national electricity-pricing reforms, then pulled back after the rush ended and fixed feed-in guarantees were replaced by market-priced electricity sales.

The slowdown has coincided with an increase in wasted power. National solar curtailment rose to 9.2% in January and February, from 6.1% a year earlier, while wind curtailment increased to 8.5% from 6.2%, according to China's grid-connection monitoring centre. The figures are higher in resource-rich provinces constrained by limited grid capacity: Tibet's solar utilisation rate fell to 60.8%, Qinghai's to 78.7% and Gansu's to 82.5%.

"This is a milestone in China's shift towards green, low-carbon energy," Liu Zhiqiang, deputy director of planning at the China Electricity Council, said of the crossover. He cautioned, however, that coal remains the "safety backstop" because solar output is intermittent. Ye Jing, who tracks power supply and demand at the same industry body, said renewable sources would continue to increase their share and that solar would remain China's leading power source in the years ahead.

That narrative — of a smooth and inevitable rise — has dominated coverage of the crossover. But the collapse in installations and the spike in curtailment point to a different interpretation: new capacity is arriving faster than the grid can absorb it, rather than falling short of demand.

The government's own targets support that view. A renewable-energy plan for 2026 to 2030, issued by the National Development and Reform Commission and the NEA on July 23, calls for combined wind and solar capacity to exceed 2.8 billion kilowatts by 2030 and generate more than 4 trillion kilowatt-hours a year — 30% of national electricity consumption, up from roughly 23% today. Combined wind and solar capacity already stands at about 1.98 billion kilowatts. Closing the remaining 820-gigawatt gap by 2030 would require adding roughly 180 gigawatts a year, well below the 430 gigawatts of wind and solar China installed in 2025 alone. The capacity target, in other words, is not the main challenge. The harder tasks are building storage and transmission, and establishing market rules that allow solar panels to operate with reliability closer to that of coal.

The pressure has also reached Hong Kong's stock exchange. GCL Technology Holdings (3800.HK), one of the world's largest polysilicon producers, narrowed its net loss for 2025 to 2.87 billion yuan. But the company has faced fresh pressure this year as polysilicon prices fell by more than 40% between January and July. Citi cut its price target for the stock in May and changed its 2026 forecast from a profit to a full-year loss, citing weak polysilicon demand since the first quarter.

The July plan also set a target for wind and solar's "reliable capacity contribution" — a measure of how much generation can be counted on during peak summer and winter demand — to reach 20% by 2030, roughly twice today's level. It did not, however, set out a timeline for the storage expansion needed to achieve that goal. The NEA's next monthly capacity report, covering August, is due in late September.

Originally published on IBTimes Hong Kong