Breaking Through 1 TW—Is China’s Photovoltaic Industry Poised to Dominate Global Energy?

Why are Chinese photovoltaic enterprises struggling with overcapacity, falling prices, and global trade barriers? Without rapid adaptation, manufacturers risk losing their competitive edge—but innovation, technological leadership, and international collaboration offer a way forward.

In 2025, China’s photovoltaic industry exceeded 1 TW of installed capacity, leading the world with 60% of new global installations and marking the era of terawatt-level solar power.

Let’s explore how technological innovation and international expansion can create opportunities for VFD manufacturers and industrial inverter partners.

The Era of Terawatt: China’s Solar Industry Hits 1 TW Milestone

In 2025, China’s photovoltaic industry reached a historic turning point—total installed capacity surpassed 1 terawatt (1 TW), equivalent to the combined capacity of 44 Three Gorges Dams. According to the International Energy Agency’s PV Power Systems Programme (IEA PVPS), global PV capacity rose from 1.6 TW in 2023 to over 2.2 TW by the end of 2024, with China accounting for nearly 60% of the world’s new installations. This dramatic growth is fueled by progressive policies, robust R&D, and market-driven innovation.

For VFD manufacturers in China and global VFD suppliers, this surge in demand opens new avenues for supplying precision industrial inverter solutions, essential for optimizing the performance of solar pumping inverters and balancing energy grids.

Driving Forces: Policy Support and Technological Breakthroughs

China’s photovoltaic industry’s meteoric rise stems from a three-pronged approach: policy incentives, technological advances, and market reforms. Key policy milestones include the 2013 directive promoting distributed and centralized solar projects, the 2018 “531 New Policy” reducing subsidies, and the 2021 “Countywide Solar Advancement” program which activated rural and urban solar investments.

On the technology front, mass adoption of PERC cells increased cell efficiency from 20% to 23%, while TOPCon and HJT cells pushed conversion rates to 25%. New materials like perovskites have achieved record-breaking lab efficiencies of 33.7%. For VFD manufacturers and industrial inverter partners, these advances mean demand for sophisticated power conversion equipment is set to soar, especially in distributed energy systems and smart grid applications.

Reshaping Global Markets: Navigating Trade Tensions

While China leads in capacity and innovation, global trade dynamics present both challenges and opportunities. In Q1 2025, Chinese PV product exports fell by 30.5% to $6.71 billion amid rising tariffs and stricter regulations, particularly from Europe and the U.S. However, China’s pivot to emerging markets in the Middle East and Africa is reshaping export strategies. For example, Saudi Arabia’s 10 GW NEOM green hydrogen project and the UAE’s 12 GW solar parks heavily depend on Chinese PV components.

This trend creates opportunities for VFD suppliers and inverter manufacturers to expand their global footprint, especially in regions prioritizing solar and wind power integration with advanced power electronics.

Innovation-Driven Growth: From Manufacturing to Smart Systems

Over the past decade, the price of Chinese PV modules dropped by 94%, from $2.5/W in 2010 to $0.15/W in 2023, driving solar competitiveness with fossil fuels. Now, the focus shifts from mere manufacturing to systems innovation. AI-powered solutions, like Huawei’s “solar-storage-charging” microgrids and smart O&M platforms, are revolutionizing solar deployment.

For VFD manufacturers in China and industrial inverter partners, this shift underscores the need to integrate intelligent control systems that maximize renewable energy utilization and reduce operational costs. Companies like USFULL are well-positioned to supply customized VFDs for these evolving needs, leveraging deep technical expertise and global supply chains.

Sustainable Synergy: Solar, Storage, and Ecological Integration

China’s photovoltaic landscape isn’t just expanding—it’s transforming rural and urban environments. Projects combining solar with agriculture (agrovoltaics) and aquaculture (fishing-solar hybrid) showcase how land use efficiency, ecological restoration, and clean energy production can coexist. For instance, Zhejiang’s tea plantations are shaded by solar panels, while Jiangsu’s fish ponds benefit from dual land use and higher yields.

This convergence opens a new frontier for VFD manufacturers and VFD suppliers to develop adaptive inverter solutions that can withstand diverse environmental conditions and optimize energy conversion efficiency in complex systems.

Countering Overcapacity: Fair Competition and Standard Setting

Despite its achievements, China’s solar industry faces overcapacity, price wars, and tightening regulations. The government’s recent “anti-involution” campaign targets unfair competition, mandates capacity controls, and promotes fair bidding practices. The shift towards a balanced industrial ecosystem presents an opportunity for high-quality, customized VFD manufacturers in China like USFULL to differentiate themselves.

In addition, China is exporting not only products but also technical standards. The International Electrotechnical Commission (IEC) PV system design standards, with Chinese leadership, are increasingly adopted worldwide. This elevates the role of VFD suppliers in setting benchmarks for performance, reliability, and integration in global projects.

Conclusion: The Road Ahead for VFD Partners

China’s solar industry has crossed the 1 TW threshold, but sustaining growth in a competitive, regulated global market requires more than production capacity. It demands innovation, integration, and collaboration. VFD manufacturers, VFD suppliers, and industrial inverter partners have a crucial role to play in this evolving landscape.

USFULL, as a leading VFD manufacturer in China, is poised to deliver advanced power electronics solutions that enable seamless integration of renewable energy with industrial applications. By aligning technological innovation with global market trends, we stand ready to support the world’s transition to a sustainable energy future.