China solar demand may reach an inflection point in 2028 due to improved curtailment

Overview

This report is a summary of a China solar industry expert call published by Goldman Sachs on June 23, 2026. The expert has long been engaged in PV policy analysis and industry research. The core view is that China PV demand is in a downcycle in 2026-2027, but improved curtailment, policy support, expanded grid investment, and power load growth may lead to a demand inflection point starting in 2028.

Core views

The report's core conclusions include three points: first, China solar installations are expected to decline about 26% YoY in 2026, broadly in line with Goldman Sachs' forecast; second, they may continue to decline in 2027 due to reduced USS project reserves, which are unlikely to be fully offset by DS-C&I and DS-Resi in the short term; third, if curtailment improvement materializes after 2028, USS demand may recover. For investors, a prolonged demand trough would delay profit recovery in the core solar value chain, but it may also improve the long-term supply-demand structure through the exit of marginal capacity.

Analysis framework

The report mainly uses an expert call summary format, comparing the expert's views on installation mix, project reserves, curtailment, grid investment, policy KPIs, and electricity load with GSe forecasts, and on that basis assessing the implications for companies covered by Goldman Sachs.

Methodology notes

• Industry expert researchExpert call

  Assess the demand cycle through views from PV policy and industry experts

  The expert has focused on PV policy analysis and industry research since 2017 and has provided consulting services to leading renewable energy enterprises and government institutions in China; the report forms meeting takeaways based on the expert's views on 2026-2030 installations, curtailment, and grid investment.

• Forecast comparisonGSe forecast comparison

  Analyze differences between expert forecasts and Goldman Sachs internal forecasts

  The report notes that the expert's 2026 demand forecast is broadly in line with GSe, but is more conservative for 2027; the expert expects continued decline, while GSe expects 14% YoY growth to 268GW in 2027.

• Equity evaluation frameworkGS Factor Profile

  Compare stock characteristics across growth, financial returns, valuation multiples, and composite metrics

  The appendix explains that GS Factor Profile uses metrics such as forward sales, EBITDA, EPS, ROE, ROCE, CROCI, and valuation multiples to compare stocks with the market and industry peers on a percentile basis.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• LONGi Green Energy Technology Co.

  Goldman Sachs-covered company; one of the representative companies in high-efficiency cells and modules; rated Buy

  Strengths

  It is positioned in the high-efficiency cells and modules segments favored by the report and may benefit relatively if the 2028 demand inflection point materializes.

  Weaknesses

  The 2026-2027 demand trough may suppress the pace of profit recovery.

  Comparison

  Goldman Sachs relatively prefers the high-efficiency cells and modules represented by LONGi over photovoltaic glass and polysilicon segments.

  Risks

  Installation demand below expectations, delayed curtailment improvement, continued pricing pressure across the value chain, and slower-than-expected capacity exit.

• Flat Glass Group (A/H)

  Goldman Sachs-covered company; photovoltaic glass segment; rated Sell

  Strengths

  The report does not elaborate on company-level positives.

  Weaknesses

  Photovoltaic glass is not among the main value chain segments favored by Goldman Sachs in this report, and a prolonged demand trough may continue to pressure profitability.

  Comparison

  Compared with high-efficiency cells and modules, the company's glass segment is assigned a lower preference by Goldman Sachs.

  Risks

  Continued decline in end-market installations, price competition, overcapacity, and delayed profit recovery.

• Tongwei

  Goldman Sachs-covered company; polysilicon-related segment; rated Sell

  Strengths

  The report does not elaborate on company-level positives.

  Weaknesses

  Goldman Sachs remains cautious on the polysilicon segment, and the demand trough and supply pressure may weigh on profit recovery.

  Comparison

  Goldman Sachs prefers high-efficiency cells and modules and underweights polysilicon-related companies.

  Risks

  Weak polysilicon prices, insufficient capacity exit, and 2027 demand weaker than GSe forecasts.

• Xinjiang Daqo New Energy Co.

  Goldman Sachs-covered company; polysilicon segment; rated Sell

  Strengths

  The report does not elaborate on company-level positives.

  Weaknesses

  It is in the polysilicon segment, which Goldman Sachs relatively disfavors, and may be affected by the industry downcycle and pricing pressure.

  Comparison

  Compared with high-efficiency cells and modules, the polysilicon segment has lower allocation appeal in the report.

  Risks

  Polysilicon supply-demand imbalance, falling prices, delayed installation recovery, and less-than-expected improvement in curtailment.

• China utility-scale solar (USS)

  Core variable for industry demand; most affected by curtailment and also the key source of the 2028 demand inflection point

  Strengths

  If clean energy absorption KPIs, grid investment, and electricity demand growth all materialize, USS may recover from 2028 onward.

  Weaknesses

  Current investment sentiment is weak, project reserves are insufficient in 2027, and grid connection has a 6-12 month lag.

  Comparison

  Compared with DS-Resi, USS is more sensitive to curtailment and project approvals; compared with DS-C&I, its recovery depends more on grid absorption conditions.

  Risks

  Curtailment improvement below expectations, delays in grid construction, insufficient project approvals, and weak execution of local energy absorption policies.

Key data

• 2026 China solar installation forecast210-245GW, midpoint 238GWDown about 26% YoY, broadly in line with GSe's 235GW and 25% YoY decline.
• 2026 USS installation forecast125-145GW, midpoint 135GWDown 18% YoY, about 2% below GSe's 138GW.
• 2026 DS-C&I installation forecast50-60GW, midpoint 55GWDown 48% YoY, about 33% below GSe's 83GW; near-term weakness is related to the longer construction cycle for direct power supply projects.
• 2026 DS-Resi installation forecast45-50GW; the original text also mentions a midpoint of 57GW, indicating an inconsistency between the range and midpointThe expert believes residential distributed solar is resilient, supported by lower financing costs and POE players accepting lower IRR thresholds.
• 2027 demand directionContinued decline but at a slower paceUSS project starts fell 34% YoY in 4M26, combined with a 6-12 month lag from construction to grid connection, pointing to subsequent pressure on USS installations.
• 2025 solar utilization hoursDeclined in 23 provinces, down 12% YoY on averageWestern regions such as Tibet and Xinjiang were most affected; eastern provinces such as Shandong also face peak-hour absorption pressure.
• 2026-2030 grid investmentAbout Rmb5tnAbove Rmb2.77tn in 2020-2025, it is an important structural factor for improving renewable energy absorption.
• 4M26 electricity consumption growth+5% YoYContinued load growth helps absorb more renewable power generation.
• Solar+ESS economicsLCOE about Rmb0.65-0.7/KWhAlready below peak electricity prices in most regions, driving DS-C&I from grid-connected models toward self-generation for self-use.

Impact & implications

For Goldman Sachs' coverage, the implication is that there is broadly no disagreement on the 2026 demand forecast, but the expert view is clearly more cautious for 2027, which may mean profit recovery in the core solar value chain is delayed from Goldman Sachs' previous estimate of 2027 to 2028. At the same time, if the industry trough persists, the exit of marginal capacity may accelerate, laying the foundation for a healthier long-term supply-demand structure. In terms of value chain positioning, Goldman Sachs prefers high-efficiency cell and module companies while relatively avoiding photovoltaic glass and polysilicon segments.

Risks

• China solar installations in 2027 may be weaker than market expectations due to reduced USS project reserves.
• If curtailment improvement is slower than expected, the 2028 demand inflection point may be delayed.
• If grid investment, clean energy absorption KPIs, or electricity load growth fall short of expectations, improvements in renewable energy absorption will be constrained.
• Direct power supply projects in DS-C&I may continue to face longer construction cycles due to complex grid backup requirements.
• If the industry trough persists, profit recovery in the core solar value chain may be further delayed from 2027.
• Solar+ESS economics are affected by changes in peak-valley electricity prices, energy storage costs, and financing conditions.

What to watch

• The intensity of execution after the NDRC incorporated clean energy absorption into mandatory provincial KPIs.
• The implementation pace of about Rmb5tn in grid investment during 2026-2030.
• Changes in solar utilization hours and curtailment rates across provinces, especially Tibet, Xinjiang, and Shandong.
• USS project approvals, starts, and grid-connection progress, as well as the impact of the 6-12 month construction lag.
• Relative changes between Solar+ESS LCOE and peak electricity prices in DS-C&I.
• Whether demand resilience in DS-Resi in southeastern China continues.
• The speed of marginal capacity exit and its impact on the timing of profit recovery in the core solar value chain.