It is amazing that China added 7.1 GW of solar capacity in the first 3 months of 2016. That’s a volume for which Europe needed an entire year. But it’s not so much about comparing China to others, they play in a different solar dimension these days.

The interesting question is rather – Will demand in China dramatically slow down for the rest of the year after nearly half of the targeted capacity for 2016 has been already installed? Or will we see China increase its target over the course of the year?

China somewhat disappointingly announced end of last year that it “only” was planning for 15 GW of new additions in 2016. That would be the same level as in 2015 – and even during that year China installed less than the 17.8 GW it had planned on earlier.

In its 13th 5-year plan, however, China had increased its solar target by 50% to 150 GW by 2020, from 100 GW. As the country had around 43 GW of solar systems end of 2015, it would need more than an average of 20 GW PV per year to comply with its new goal (see China Q1/2016 PV Capacity).

For that reason, one might think that the 7.1 GW installed capacity in Q1/2016, which is over 2 GW more than the 5 GW added in Q1/2015, would indicate that the target should be lifted towards 20 GW.

But China is already having many issues to fix with an annual 15 GW market. We only have to remember the big plans to revise the focus from centralized toward distributed generation, which has not taken place so far. And this despite the grid issues and curtailment of PV power plants that have been already causing big problems, also hurting many IPPs in China. Shunfeng International Clean Energy, for example, said in its annual results that the government owed the company over 1 billion RMB in subsidies, and moreover, the bulk of its solar power plants in China were affected by power output restrictions.

That’s why I don’t believe that the strong first quarter means more new PV power in China than last year. It rather means that Chinese PV companies, which dominate the domestic market, now have to look for other markets. So I would prepare for decreasing module prices over the coming months, even more, when taking into consideration that new capacities are quickly coming online.