China’s Solar Capacity Overtakes Coal for First Time

China’s solar photovoltaic (PV) installed capacity has historically surpassed coal power for the first time, making solar the country’s largest power source by installed capacity, the National Energy Administration (NEA) announced on September 1. As of the end of July 2026, solar PV capacity reached 1.286 billion kilowatts (1,286 GW), while coal power stood at 1.285 billion kilowatts (1,285 GW), according to Xinhua News Agency.

A Historic Milestone in China’s Energy Transition

The milestone breaks a pattern that had persisted for more than a century since the birth of the electric power industry, with coal as the largest power source. Solar PV now accounts for 31.5 percent of China’s total installed power generation capacity of 4.08 billion kilowatts, with centralized utility-scale solar at 704 million kilowatts and distributed solar at 582 million kilowatts.

“This is a landmark event in the process of China’s green and low-carbon energy transition,” Liu Zhiqiang, deputy director of the Planning and Development Department at the China Electricity Council, told Xinhua. “The new-type power system with new energy as the mainstay is being accelerated.”

The achievement represents the third major milestone in China’s energy transition: renewable energy installed capacity first exceeded coal in June 2023, combined wind and solar capacity surpassed thermal power in Q1 2025, and now solar PV alone has overtaken coal power by installed capacity.

Solar Generation and Coal’s Declining Share

From January to July 2026, China’s solar PV generated 802.4 billion kilowatt-hours, up 15.5 percent year-on-year, accounting for 13 percent of total social electricity consumption — meaning one in every eight kilowatt-hours of electricity used in China now comes from solar, as Global Times reported.

This follows another historic first: coal-fired power accounted for 49.7 percent of China’s total electricity output in the first half of 2026, marking the first time its share has fallen below 50 percent, according to CGTN. The figures reflect the phased progress China has made in expanding non-fossil energy as a substitute for conventional fossil fuel generation, said Xing Yiteng, an NEA official.

“This historic leap has consolidated the power foundation for achieving the ‘dual carbon’ goals,” Hao Yingjie, secretary-general of the China Electricity Council, told People’s Daily. “The power industry is a key area for carbon emissions. The continued expansion of solar PV generation reduces the carbon intensity of the power industry, expands green electricity supply capacity, and provides clean power support for electrification upgrades in industry, transportation, and other sectors.”

Capacity vs. Generation: A Critical Distinction

Despite solar surpassing coal in installed capacity, coal still generates far more actual electricity. Solar PV operates at capacity factors of 15-20 percent due to intermittency from day-night cycles and weather, while coal plants run at 45-50 percent capacity factors around the clock.

“Solar PV generation is constrained by day-night alternation and meteorological conditions, with significant intermittency and volatility, and utilization hours far lower than coal power,” Liu Zhiqiang noted. “In the short term, coal power remains China’s main supporting power source, playing a system safety backstop role.”

Coal power is accelerating its transformation from a base-load power source to a supporting and regulating power source. During midday hours when renewable generation peaks, coal plants perform deep peak-shaving to make room for wind and solar. During night and cloudy periods when renewable output drops, coal plants rapidly ramp up to fill the gap.

“The role of coal power is undergoing a profound transformation, shifting from its traditional position as the primary power source to one that provides stable support and acts as a backup for renewable energy,” Lin Boqiang, director of the China Center for Energy Economics Research at Xiamen University, told Global Times.

Policy Changes and Installation Slowdown

China’s record pace of renewable installations has slowed significantly in 2026 after a policy overhaul ended guaranteed revenue (fixed-price tariffs) for wind and solar projects, replaced by a contract-for-difference (CfD)-style system. China added 86 GW of solar in the first seven months of 2026, compared to 93 GW in May 2025 alone — the last month before the new policy took effect, as Business Times reported.

The new system has created “greater uncertainty” for developers, compounded by fierce competition and a growing push for consolidation in the industry, Yang Biqing, energy analyst for Asia at think tank Ember, told Carbon Brief. “China’s solar industry is no longer a story of capacity expansion,” Yang said, with officials now increasingly focused on integrating current generation into the grid.

Grid integration remains a significant challenge. Solar curtailment reached 9.4 percent and wind curtailment 8.6 percent in January-February 2026, up from 6.1 percent and 6.2 percent respectively in the same period of 2025, according to Discovery Alert. The regulatory framework permits curtailment rates of up to 10 percent without triggering mandatory corrective action.

Global Leadership and Investment Outlook

China ranks first globally in PV installed capacity, far surpassing the US, India, and Germany, and exceeding the combined PV installations of all EU member states. Chinese solar modules account for about 80 percent of global output, with the country having built a complete PV industry chain for R&D, design, and integrated manufacturing.

“This historic leap confirms the competitive advantage of China’s complete PV industry chain,” Liu Zhiqiang said. “Large-scale domestic installation applications further release scale effects, driving PV technology iteration and upgrading.”

Over the next five years (the 15th Five-Year Plan period, 2026-2030), investment in the solar industry is expected to surpass 2 trillion yuan (about $297.6 billion), as CGTN reported. The Renewable Energy Development 15th Five-Year Plan targets renewable energy annual generation of about 6 trillion kWh by 2030, with wind and solar combined at 4 trillion+ kWh.

What’s Next

The milestone marks a symbolic shift in the world’s largest energy system, but the path forward involves significant challenges. China must convert its solar capacity advantage into reliable, dispatchable power through technological innovation and system optimization.

“China will gradually improve solar PV’s confidence output and peak generation capacity through technological innovation and system optimization,” Liu Zhiqiang said, “exploring diversified development models including integrated PV-storage, PV-thermal complementarity, and solar-powered hydrogen production, promoting the transformation of solar from ‘weather-dependent’ to ‘dispatchable and predictable.’”

As CNBC-TV18 noted, the milestone demonstrates that China’s solar industry has achieved a historic position in the country’s power mix. The key question now is whether grid reform, storage deployment, and market mechanisms can keep pace with the rapid expansion of renewable capacity — a challenge that will shape not only China’s energy future but the global trajectory of the clean energy transition.