Overview of the 2023 Residential PV Market: A Record‑Breaking Year

In 2023, China’s residential distributed photovoltaic (PV) market achieved a historic breakthrough. According to data released by the National Energy Administration (NEA), the country’s newly connected PV capacity in 2023 reached 216.30 GW, of which residential PV accounted for 43.48 GW. This represented about 20% of total new PV capacity and approximately 45.2% of newly added distributed PV capacity.

By the end of 2023, cumulative installed residential distributed PV capacity nationwide exceeded 115 GW, equivalent to about five Three Gorges power stations, and the number of residential rooftop PV installations in rural areas surpassed 5 million households. According to estimates, under China’s average sunshine conditions, a 1 kW residential distributed PV system can generate about 1,200 kWh of electricity per year, reducing coal consumption by roughly 400 kg and carbon dioxide emissions by about 1 ton.

The rapid growth of residential PV in 2023 was driven by multiple factors: the full rollout of the “county‑level whole‑district promotion” pilot program, significant declines in PV module prices, shorter payback periods, the expansion of “state‑owned enterprise + private enterprise” joint development models, the proliferation of commercial leasing schemes, and the influx of major PV manufacturers and home appliance giants. Year‑on‑year, new residential PV installations surged by 72%, reaching an all‑time high.

II. Policy Support: Whole‑District Promotion and the “Thousands of Households Sunshine Action”

In 2023, national policymakers continued to strengthen support, injecting strong momentum into the residential PV market.

In April, the NEA issued the 2023 Energy Work Guidance Opinion, explicitly calling for the implementation of the “Thousands of Households Sunshine Action” for PV, steadily promoting whole‑district rooftop PV pilot projects, advancing clean energy use in rural areas, and accelerating the low‑carbon energy transition in villages.

In July, the NEA responded to a proposal from the 14th National People’s Congress, reaffirming the “five prohibitions” in the whole‑district pilot work. It also conducted a special survey on the pilot projects and encouraged closer cooperation between central/state‑owned enterprises and private companies to explore new distributed PV development models. At the same time, the NEA worked on a policy document to further promote the healthy development of residential PV, clarifying definitions, filing requirements, construction, grid connection, power consumption, operation & maintenance, and supervision.

In June, the NEA released the Notice on the Pilot Assessment of Distributed PV Access to Grid Capacity and Enhancement Measures, selecting certain provinces for pilot studies. A mechanism was established to assess, publish, spot‑check, improve, and supervise the grid‑carrying capacity for distributed PV, thereby rationalising the filing schedule and construction timing for distributed PV projects.

In March, the NEA, together with the Ministry of Ecology and Environment, the Ministry of Agriculture and Rural Affairs, and the National Rural Revitalization Administration, issued the Notice on Organising the Construction of Pilot Counties for Rural Energy Revolution, encouraging the installation of PV on newly built residential rooftops, factory and public building roofs, and farmers’ own roofs.

At the local level, various regions introduced subsidies for residential PV. For example, Haiyan, Zhejiang, offered a one‑time subsidy of RMB 0.2/W to roof owners for projects connected to the grid between 1 January 2022 and 31 December 2023, up to a maximum of RMB 2,000 per household. Lishui, Zhejiang, published a subsidy list for 65 residential PV projects. Jinhua, Zhejiang, provided an additional RMB 0.1/kWh subsidy on top of national and provincial subsidies. These local incentives effectively stimulated household adoption.

III. Sharp Declines in Industry Chain Prices, Significant Cost Reductions

In 2023, PV industry chain prices experienced unprecedented sharp declines, a key factor driving the residential PV market boom.

Over the year, PV module prices fell from RMB 1.8‑1.9/W at the beginning to below RMB 1/W for P‑type modules by October. By the end of 2023, average selling prices for the four main segments – high‑purity polysilicon, wafers, cells, and modules – had dropped by 80%, 58%, 60%, and 45% respectively from the start of the year. In the fourth quarter, wafer, cell, and module prices hit record lows. Overall, the entire PV chain saw prices trend downward, with module prices falling by more than 60% during the year.

The main reasons for this price collapse were overcapacity across the PV chain and intense price wars as module supply outstripped demand. Polysilicon prices, which had peaked at around RMB 330,000/ton, plunged by about 80%.

For end users, lower system construction costs brought tangible benefits. In 2023, distributed PV system costs (residential) were around RMB 2.5‑3.5/W, down more than 80% from a decade ago. The internal rate of return (IRR) for commercial‑industrial projects reached 8‑15%, while residential payback periods shortened to 5‑7 years. According to Huafu Securities, at 90% utilisation, the IRR for residential PV in 2023 was about 7.87%. Jidian Co. stated that the IRR for its residential distributed PV projects was no less than 9%.

IV. Competitive Landscape: A Crowded Field of Major Players

In 2023, competition in the residential PV market intensified, with many new entrants. According to incomplete statistics, there were at least 15 first‑tier brands in the residential market.

On the private side, leading module manufacturers launched their own residential platforms: LONGi’s “Sunflower”, JinkoSolar’s “Jinko Power”, JA Solar’s “JA Solar Home”, Trina Solar’s “Trina Home”, CHINT’s “CHINT Aneng”, and Sungrow’s “Sungrow Home”. At the 18th China (Jinan) International Solar Energy Utilization Conference in March 2023, more than 600 energy companies exhibited, with the top 20 PV module makers all present. JA Solar Home introduced four innovative solutions – sunroom, flat‑to‑slope, truss, and courtyard. Trina Solar showcased its new “Trina Home PV Garden” product. JinkoSolar exhibited high‑efficiency N‑type TOPCon modules.

At the same time, central power SOEs and local state‑owned enterprises accelerated their entry into residential PV. China’s State Power Investment Corporation (SPIC), State Energy Group, Huaneng, Three Gorges Corporation, and CSG Energy all began expanding in the residential PV space. The market has evolved into a “SOE + private PV enterprise” cooperation model. SPIC has formed strategic partnerships with GCL Group, Jolywood, CHINT, and Trina Solar to develop residential PV.

In terms of overall module shipments, LONGi, JinkoSolar, and Trina Solar each recorded annual revenues exceeding RMB 100 billion in 2023. JinkoSolar, leveraging its N‑type capacity advantage, regained the global crown for PV module shipments from LONGi. LONGi has been the market leader in the commercial‑industrial distributed segment for many consecutive years, with annual shipments stably above 10 GW. White‑goods manufacturers such as TCL, Haier, and Konka have also crossed over into the residential PV market.

V. New Market Trends: Southward Shift and Diversifying Applications

Two notable trends emerged in the residential PV market in 2023.

1. Southward shift of market focus. The regional distribution of residential installations changed significantly. The traditional strongholds – Shandong, Hebei, and Henan – saw their share decline, while markets in southern provinces (especially Hunan, Hubei, Jiangxi, and Fujian) grew rapidly. For instance, Shandong fell to third place in new residential capacity, Hebei dropped out of the top five, whereas Jiangsu, Anhui, and Zhejiang rose to prominence.

The main reason for this southward shift is the limited distribution grid capacity in some northern provinces. In parts of Hebei, Shandong, and Henan, the capacity of distribution transformers and lines has reached saturation, leaving no room for 380V residential PV connections. Some connection applications have been suspended pending grid upgrades. This indicates the end of extensive, uncoordinated distributed PV development; under constraints such as grid capacity, distributed PV must pursue more refined, high‑quality development.

2. Diversification of application scenarios. The share of “sunroom” type installations rose sharply from less than 10% to around 40%, and in some regions possibly reaching 80‑90%. This shift reflects the evolution of residential PV products from a pure power‑generation function towards a deeper integration with building aesthetics.