Global solar energy development is set to slow down this year—including in China, where recent policy changes could limit progress towards reducing emissions.

“The solar industry is entering a low-growth phase after years of rapid expansion,” BloombergNEF said in its Global PV Market Outlook.

The decline will be the first time global solar growth has slowed since the industry emerged two decades ago. The analysis anticipates that a total of 649 gigawatts (GW) of solar power capacity will be installed in 2026, a small drop compared to 2025’s 655 GW of new additions.

However, BNEF says growth will start to rebound in 2027, when it expects to see 688 GW of solar capacity installed.

This year’s expected decline is largely linked to policy changes in the U.S. and China that have slowed growth. Other economies will be unable to pick up the slack, even with their own growth expected to be strong.

The changes in U.S. solar policy come from the Trump administration’s hostile stance on non-fossil fuel energy sources, reports Oil Price. The Solar Energy Industries Association (SEIA), reports that political attacks on the U.S. solar and storage industry threaten up to 519 projects, representing 117 GW of capacity and half of the new installations under way.

In China, a new renewables pricing mechanism in 2025 removed a guaranteed rate of return, alarming investors and causing slower growth later in the year after a rapid solar and wind rollout in the first half of 2025. China has also enacted stricter controls on solar manufacturing capacity that caused major losses for some companies.

In its latest 2025-2030 renewables outlook released [pdf] last fall, the International Energy Agency cut its expected global solar growth by 5% compared to its projections a year earlier, after factoring in an anticipated 50% decline in the U.S.

Meanwhile, an analysis by the Finland-based Centre for Research on Energy and Clean Air (CREA) draws attention to other policies that could raise China’s emissions intensity per unit of gross domestic product, weakening the country’s progress towards cutting annual emissions.

Though its emissions growth dropped to just 0.6% in 2024 and stayed roughly flat in 2025, CREA warns that China’s recently-announced emission targets for 2035 “fall well short of what the country needs to do to align with the global goals of the Paris Agreement.” It says increasing energy demand, continued permitting of new coal plants, and rapidly-expanding coal and oil use in the chemical sector are offsetting progress in other sectors.

China’s clean energy growth is likely to roughly maintain its strength and continue growing, CREA says. But as long as total energy consumption continues to rise significantly faster than in climate transition pathways, clean energy investments will need to rise to keep the sector’s CO2 emissions on track.

“The alternative is for policymakers to guide the country’s economic development in a less energy-intensive direction and increase investment in energy efficiency in various industries, particularly in buildings,” writes CREA.