China’s solar power installations jumped by 30% in October from September, as capacity additions rebounded from the summer months, which had seen a new renewables pricing mechanism alarming investors.
Chinese developers installed 12.6 gigawatts (GW) of solar power in October, up by 30% from September, according to data by the National Energy Administration (NEA) cited by Reuters.
Following booming solar and wind installations in the first half of the year, China introduced a new renewable pricing mechanism, which removed a guaranteed rate of return. This led to a slump in Chinese solar installations in the summer months.
Yet, last month saw a rebound and if installations continue at the October rate in November and December, China could replicate the 2024 solar installation record of 277 GW, according to analysts.
China moved in June from an auction-free mechanism to a new pricing mechanism for projects built after June 1, 2025.
This policy shift had renewable power developers rush to complete installations by June 1 to qualify for the auction-free mechanism—hence the booming solar and wind installations in the first half of 2025.
Onshore wind and utility solar levelized cost of energy (LCOE) has fallen by 7% in 2025, further improving project economics for developers who secured auction-free mechanism access before the deadline, a Wood Mackenzie analysis showed earlier this month.
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The new mechanism for projects completed after June 1 has significantly different terms, with execution periods averaging just 10 years compared to 18 years under the auction-free structure, WoodMac notes.
“The pricing mechanism evolution reflects China’s broader energy transition strategy, but success will depend on managing grid integration challenges and maintaining investor confidence,” said Sharon Feng, senior analyst, China power market at Wood Mackenzie.
“After the breakneck addition of 264 GW of wind and solar in the first 6 months, the renewable development will switch to a more sustainable growth pattern, focusing on quality over quantity, which is the key tone of the 15th Five Year Plan.”
By Tsvetana Paraskova for Oilprice.com
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