Solar's price collapse reshapes global power markets as scale races ahead of policy

Solar's price collapse reshapes global power markets as scale races ahead of policy Falling panel costs and a wave of gigascale projects are redrawing the competitive map for electricity generation worldwide. Golden State Clean Energy is developing a 21 GW solar farm in California — enough, by the developer's own estimate, to power an entire city — as the race to build the world's largest solar installations accelerates across two continents.⁸ That matters because the economics driving such projects have shifted faster than most power markets were designed to handle. Over the past two decades, solar panels have fallen sharply in price while efficiency has risen, a combination that has turned utility-scale solar from a subsidy-dependent experiment into the cheapest form of new electricity generation in most markets. BloombergNEF now projects solar will become the largest source of power globally by 2035, surpassing coal, oil and natural gas.^3,8 China sits at the centre of that transformation, and not always comfortably. The country accounts for nearly 40% of global investment in clean energy and was responsible for close to 90% of the $378 billion spent worldwide between 2018 and 2023 on the factories and supply chains that produce wind turbines, electric vehicles and solar panels, according to BloombergNEF.⁷ But Beijing has moved to slow the pace. China announced this year it was halting approvals for some new solar projects and cutting subsidies to developers, a deliberate effort to ease an expansion that was outrunning grid infrastructure. The largest single solar complex currently operating is China's 16.9 GW Talatan Solar Park.^8,1 The supply consequences will land elsewhere. India, whose domestic solar-cell manufacturing capacity stands at roughly 3 GW annually against average yearly demand of 20 GW, depends on the international market for the remainder. Industry experts say Chinese policy changes could cut module prices in India by up to 25%.¹ That is not straightforwardly good news for New Delhi. Cheaper imports would accelerate India's renewable build — the country has pledged to roughly double renewable power capacity — but would simultaneously undercut domestic manufacturers who cannot compete at those price levels, according to India's Ministry of New and Renewable Energy. The tension between import competitiveness and industrial policy is one that other markets have navigated badly.¹ Pakistan offers a different illustration of where cheap Chinese panels lead. The Economist reported that rooftop solar has expanded rapidly there, reshaping household electricity decisions while the government separately tries to attract Chinese investment in local manufacturing of panels and batteries. The speed of adoption has outpaced the country's ability to manage its power market.⁴ In the United States, the energy transition is advancing against a different backdrop. The power sector remains the largest stationary source of greenhouse gases, contributing roughly 25% of overall domestic emissions and approximately 30% of CO2, according to EPA data. Nearly 90% of coal capacity carried pollution control technology as of 2023, but coal retirements are accelerating as gas, wind, solar and battery storage take share.² The complication is demand. BloombergNEF's analysis points to AI data centres and industrial electrification driving a historic rise in power consumption that will run alongside solar's expansion rather than being displaced by it. Solar may win the generation mix by 2035, but fossil gas is expected to remain a significant source in the interim, particularly for dispatchable capacity when variable renewables fall short.³ China faces a version of the same contradiction at greater scale. Electricity accounts for roughly 30% of China's final energy consumption, above levels in either Europe or the United States, and that share is rising. Yet coal projects continue to be approved alongside record renewables deployment — what Ember analyst Muyi Yang has described as a "build before breaking" approach, in which new coal fills gaps until the grid can be restructured to carry intermittent supply reliably.^6,5 The immediate question for power markets is whether the gigascale solar pipeline translates into grid capacity or stranded investment. California's 21 GW project and China's curtailment of new approvals point in opposite directions simultaneously: one country is accelerating while the other pauses to absorb what it has already built. The gap between installed capacity and actual generation — driven by curtailment, grid constraints and storage shortfalls — will determine whether these headline numbers change electricity prices or merely energy statistics.^8,6 What traders should watch is how quickly India's module price expectations feed through to project pipelines, and whether Beijing's approval freeze extends beyond 2026. A prolonged Chinese slowdown in new capacity would tighten the global equipment market just as the US and European build programmes are scaling up.¹