New Energy Power Station Investment "Mass Withdrawal" as Contract Volume Drops by 66%

New Installations Reached 277.57 GW, Up 28.33% YoY!

On the day before Chinese New Year's Eve in 2025, the National Energy Administration released the 2024 installation report card for the PV industry. Unlike the gloomy atmosphere on the manufacturing side, the power station market, despite a slowdown in installation growth, still achieved a record-high total of new installations, injecting a "booster shot" into the PV industry, which is currently at a "low point."

However, alongside the excitement, there is also concern within the industry about the future development of the downstream market. With strict land-use controls, insufficient consumption, grid connection difficulties, and accelerated market entry, can the power station market maintain its growth in 2025? Will it achieve new milestones?

A Decline of Nearly 66%—Who Withdrew?

To address these questions, we can look for answers in the large-scale new energy project agreements and investment announcements involving PV by major power station developers.

According to incomplete statistics from Polaris, in 2024, at least 40 power station developers nationwide completed 58 agreements and investment announcements for large-scale new energy projects (hereinafter referred to as "new energy projects"), with a total investment of approximately 216.18 billion yuan, down 71.75% YoY. The total scale of projects that can be counted reached about 44.8 GW, down 65.66% YoY, of which PV accounted for about 26.7 GW, a decline of 67.22%. "Two integrated" projects, new energy bases, and composite PV projects such as agrivoltaics, pastoral PV, and aquavoltaics accounted for over 41.06 GW, with their share rising to 91.66%, while the share of ordinary centralized PV projects dropped from 9.67% to 8.34%.

This change appears to align with the slowdown in the growth rate of new PV installations in 2024. However, looking back over the past five years, 2024 stands out as the only year with a total signed scale of new energy projects below 100 GW and the year with the smallest scale of signed and planned new investments in new energy projects by state-owned power station developers.

Specifically, among the total signed and planned new investment scale of 44.8 GW, 26 central and state-owned power station developers accounted for less than 84%, with a total of about 37.59 GW.

Among them, China Three Gorges Corporation ranked first with a total scale of 12.8 GW (8.8 GW explicitly PV), with a total investment of 72.95 billion yuan. The signed scale of the Tarim Basin New Energy Base Project in southern Xinjiang alone reached 12.5 GW. It is reported that the southern Xinjiang base includes 8.5 GW of PV, 4 GW of wind power, and supporting 6×660,000 kW coal power and 5 million kWh of new-type ESS. By the end of December last year, the coal power project had already started construction in Ruoqiang County, Bayingolin Mongolian Autonomous Prefecture.

Apart from China Three Gorges Corporation, the total scale of the remaining 25 central and state-owned developers did not exceed 10 GW. Huaneng ranked second with a total new energy scale of 5 GW in 2024, signing only two integrated projects: a 4 GW wind-solar-storage integrated power generation project in Huma County, Heilongjiang, and a 1 GW wind-solar-storage integrated energy base project in Horqin Right Front Banner, Hinggan League, Inner Mongolia. The "land-grabbing enthusiasts" of previous years, China Energy Investment Corporation and PowerChina, followed closely with 4.8 GW and 4.3 GW, respectively. Besides Inner Mongolia, Xinjiang, and Heilongjiang, Hebei, Hubei, Yunnan, Anhui, and Hunan were also favoured by these two companies.

The only other developers with a total scale exceeding 1 GW were Panjiang Investment, Datang, and Shanxi Construction Investment. Meanwhile, SPIC, PowerChina, CGN, CECEP, and Shandong Water Investment Group had scales ranging from 60 MW to 900 MW.

In fact, with their strong financial resources, procurement bargaining power, and resource allocation capabilities, the "state-owned army" has always been the main force in developing large-scale PV power stations. From 2021 to 2023, the total annual signed scale of new energy power stations exceeded 100 GW, consistently accounting for over 90% of the annual total. However, in 2024, this figure dropped to less than 84%. Moreover, local state-owned enterprises were far more active than central enterprises. Fourteen provincial and municipal state-owned enterprises, including Panjiang Investment, Shanxi Construction Investment, Sichuan Energy Investment, Sichuan Road & Bridge, Tongbao Energy, Guangdong Construction Engineering, and Shanghai Electric, signed agreements and announced planned investments.

Admittedly, the PV industry in 2024 was deeply mired in cut-throat competition, but this was mostly confined to PV manufacturing and downstream distributed PV sectors. Why have central and state-owned enterprises changed their investment attitudes in the large-scale power station market?

From Rapid Expansion to Selective Operations, Top-Level Pressure Eases

To trace the root causes, we might first explore the motivations behind various groups entering the PV power station development race.

As key pillars of the national economy, central and state-owned enterprises bear not only economic responsibilities but also social and political ones. Since September 2020, when China announced its "3060" dual carbon goals and the target of exceeding 1.2 billion kW of wind and solar installations at the 75th United Nations General Assembly, accelerating green transformation has become one of the central and state-owned enterprises' key responsibilities and missions.

In December of the following year, the State Council issued the "Guiding Opinions on Promoting High-Quality Development of Central Enterprises to Achieve Carbon Peaking and Carbon Neutrality," proposing that by 2030, the proportion of renewable energy in the installed capacity of central enterprises should exceed 50%. It also required central enterprises to accelerate the development of non-fossil energy and comprehensively promote the large-scale, high-quality development of wind and solar power.

As a result, increasing renewable energy installations and optimizing the power generation structure became the primary goals for central power enterprises, with the five major power generation groups leading the charge.

Looking back at the data, by the end of 2021, only SPIC among the five major power generation groups had achieved a total clean energy installed capacity of 120 million kW, accounting for 61.53%, while the other four ranged between 28% and 45%, indicating a long road ahead. Under such goal-oriented pressure, the aggressive land acquisition in the new energy power station development market over the past three years is understandable.

However, as of today, with the vigorous promotion of PV and wind power development by these groups, the goal of "over 50%" is now within reach. According to Polaris statistics, by the end of 2024, three of the five major power generation groups had achieved this target, while the other two had surpassed 40%.

Meanwhile, in the competition for over 260 GW of wind and solar quotas allocated by provinces in 2024, the five major power generation groups secured nearly 76 GW. Combined with the "inventory" of ongoing national wind and solar base projects, it is evident that these groups are well on track to complete their top-level tasks. Therefore, the decline in investment enthusiasm and the subsequent drop in power station signing scales are not surprising.

Accelerated Market Entry of New Energy, Uncertain PV Project Yields Deter Developers

Beyond the easing of target pressure, the uncertainty of expected returns from PV power stations is another major factor deterring some developers.

In the past, thanks to subsidy policies and robust market demand, PV projects in China often achieved relatively stable investment returns. However, as grid connection scales continued to grow, consumption issues intensified, and with the dense release of grid parity and new energy market entry policies, project yields began to show a downward trend.

Taking new energy market entry as an example, according to Polaris statistics, as of now, no fewer than 17 provinces nationwide have issued electricity market trading rules for new energy projects. Guangdong, Hebei, and Qinghai have become top performers in high-proportion new energy market entry. In Hebei, a major PV installation province, the proportion of PV provincial marketized electricity entering the market in the southern grid region is as high as 60% by 2025, with wind power at 30% and commercial and industrial distributed market entry requirements at 20%. By 2030, commercial and industrial distributed and non-individual household PV projects will be required to fully enter the market.

Faced with the accelerated market entry of new energy and the risk of declining project yields, power station developers have shifted from blind expansion to more cautious and refined investment control. In October last year, SPIC's subsidiary, SPIC Energy, announced its intention to cancel the approved 40 MW household distributed PV project in Ar Horqin Banner, Chifeng City, citing that the project's capital financial internal rate of return was only 8.53% under the latest requirements for distributed PV project investment yields, making it unviable to proceed. Twenty days later, the cancellation proposal was approved at the company's shareholder meeting.

Although the Chifeng project was not a large-scale centralized PV project, it reflects the overall investment trend in the power station market.

In summary, while the PV power station market reached "new heights" last year, the investment attitude of the main market players has become more cautious. Whether PV power station installations in 2025 will achieve new milestones remains uncertain, but it is clear that the industry is entering a more refined and healthier new phase.