1st Q25: China Installs 36 GW Rooftop Solar As New Rules Spur Rush

China installed a record 60 GW of new solar photovoltaic (PV) capacity in the first quarter of 2025 – the highest ever recorded in a first quarter in the country’s history, according to Rystad Energy research and analysis. Rooftop PV accounted for 60%, or 36 GW, of that total, marking the largest quarterly capacity addition for distributed PV in China’s history. The surge was largely driven by the urgency to meet policy deadlines set by the National Energy Administration’s (NEA) new guidelines, which were released in October last year and put into effect this May. The directive encouraged self-consumption of distributed solar projects to ease grid congestion issues, improve grid stability, and cut reliance on centralized power plants.

Limitations on grid access for distributed PV projects can bring uncertainties for developers’ revenue streams, but it can also accelerate carbon trading and green certificate developments, thus creating new revenue options for developers. Looking ahead, steady growth in China’s annual solar PV capacity is expected until 2030.

Rooftop Solar Installations

Further research indicates that the surge in rooftop PV installations will continue into the second quarter of the year, pushing total distributed solar capacity additions for 2025 to 130 GW, comprising 92 GW from commercial and industrial (C&I) projects and 38 GW from residential projects. While the impact on the installation rush for utility-scale PV is expected to be lower, this year is still on track to set a new record, with 167 GW of new utility projects expected. This growth is primarily driven by the large-scale project pipeline and accelerated efforts of provincial governments to meet targets under China’s 14th Five-Year Plan, which concludes this year.

Distributed Solar 

As distributed PV gains momentum under the new guidelines, it will have significant repercussions for the C&I sector in China. Full grid access has been canceled for C&I projects, but standard projects up to 6 megawatts (MW) can still self-consume and partially sell excess power to the grid. Meanwhile, large-scale C&I projects – defined as projects with a capacity larger than 6 MW – will be required to fully utilize power generation and will no longer be allowed to sell power to the grid.

While these new guidelines are pushing China forward, they’re having a dual impact on the C&I sector which typically has limited or no grid connection. On one hand, increased self-consumption in C&I rooftop PV projects is easing grid connection challenges and helping ease grid congestion across the country. The rules are also helping to accelerate progress in carbon trading and green certificate markets, with storage installations expected to rise. However, the added complexity in purchase agreements may introduce new uncertainty and potentially weigh on project economics, which could dissuade developers, investors, and financiers, Yicong Zhu, Vice President, Renewables & Power Research, Rystad Energy

National Guidelines

While national guidelines have been clear, provincial implementation has varied, with different regions adopting distinct approaches to distributed PV projects in response to the new NEA directive. Most provinces now require a minimum self-consumption rate of 50% for standard C&I projects up to 6 MW and full self-consumption for projects exceeding that threshold. Some provinces, such as Inner Mongolia and Jilin, have introduced the country’s strictest requirements – mandating that C&I projects (up to 6 MW) self-consume at least 90% and 80% of their generated power, respectively.

Reflecting these strict policies, Inner Mongolia commissioned only 82 MW of C&I projects in the first quarter, with rooftop C&I accounting for less than 4% of its total installed solar PV capacity. Jilin saw 40 MW of new C&I capacity in the same period, with rooftop C&I making up 16% of its cumulative solar PV installations. Both Northern provinces noted that these requirements may be revised in the future, depending on changes in grid and distribution network conditions.

In contrast, Jiangsu and Guangdong – the top two provinces in terms of new solar PV installations in the first quarter – did not impose self-consumption requirements for standard C&I projects in their provincial guidelines. Rooftop C&I accounts for a significant portion of installations in both provinces, prompting a more supportive policy stance. Additionally, both provinces offer greater flexibility for large-scale C&I projects to secure grid access, allowing them to either apply for approval as utility-scale projects or switch to utility-scale status after approval to become eligible for grid connection.

Beyond self-consumption thresholds, Shandong and Hubei have introduced an additional requirement: all excess power from C&I projects connected to the grid must be traded in power markets. This aligns with the NEA’s push for new renewable projects to adopt market-based pricing.