Today is March 26, 2026, less than a week from the end of the first quarter of this year. But for the photovoltaic industry, this start to the year is more than just a simple good beginning; it's like flooring the gas pedal.
In the past two days, a set of data has spread rapidly within the industry, even causing quite a stir.
Data from some organizations shows that in the first quarter of this year, China's exports of solar panels to the Middle East surged by 470% year-on-year, while energy storage systems saw an even more dramatic increase of 620%. Even more intriguing is that over 90% of these orders are long-term contracts of three years or more.
What does this mean? It's not simply about selling more goods; it's about a shift in the order structure, moving from short-term bargaining to long-term commitments.
More importantly, all of this is happening at a delicate juncture.
On one hand, trade barriers in the European and American markets are constantly being tightened, with policy thresholds rising at every level; on the other hand, the Middle Eastern market is suddenly experiencing a surge in demand. The Middle East, once known for its oil, is now re-entering the global energy landscape in a different way.
This raises the question: is this surge in Middle Eastern demand merely a temporary opportunity arising from geopolitical turmoil, or is it a genuine shift in the focus of China's photovoltaic (PV) exports?
01. Why the Middle East? This Demand Surge Wasn't Sudden
While March's customs data hasn't been officially released, the trends of the previous two months already offer some clues. Chinese customs data shows that in January and February 2026, the national export value of PV modules was 22.48 billion yuan, a year-on-year decrease of 9.26%; the total export volume was 72.0777 million units, a year-on-year decrease of 3.42%. Overall, PV exports haven't seen significant growth, and have even experienced a slight decline.
But the real change lies in the structure. The Middle East and North Africa market's share has quietly risen to 25.6%, becoming the second largest export region after Europe. In other words, it's not that more are being sold, but rather that the destination has changed significantly.
If we add the industry dynamics of March, this trend becomes even clearer. China Power Construction Corporation (China Power) secured a major contract in Abu Dhabi, UAE, for 2.1GW of solar PV and 7.75GWh of energy storage, worth approximately RMB 13.962 billion.
This means that the growth of the Middle East solar PV market is not a random fluctuation, but a concentrated manifestation of a trend.
Then the question arises: why now? And why the Middle East? If we break it down, this surge in demand is driven by at least three forces simultaneously.
The first is policy. Middle Eastern countries are accelerating their energy transition. Saudi Arabia's "Vision 2030" aims to reach 100-130GW of renewable energy capacity by 2030, with clean energy accounting for 50%; the UAE's "Net Zero 2050 Strategy" also clearly states that it will increase the share of clean energy to 50%, with renewable energy accounting for 44%.
When these goals move from documents to implementation, they translate into a series of concrete projects, tenders, and orders. As Zhang Chuanwei, Chairman of Mingyang Group, stated at the Boao Forum last November, the Middle East is advancing gigawatt-scale wind and solar PV projects, with extremely strong market demand. The second layer is the demand itself. Electricity consumption growth in the Middle East is far faster than many people imagine. Data from the International Energy Agency shows that from 2000 to 2024, electricity demand in the Middle East and North Africa has more than tripled, with an average annual growth rate of 3.7%, significantly higher than the global average.
On the one hand, the electricity consumption for air conditioning due to extreme heat is a rigid demand. In countries like Saudi Arabia, summer temperatures often exceed 50°C, and air conditioning load can account for 70% of peak electricity consumption. On the other hand, new large electricity consumers are emerging, such as AI data centers and seawater desalination systems. These are high-energy-consuming infrastructures that require a stable power supply.
As demand continues to rise, the power system must find new support points, and solar power is one of the most cost-effective options.
The third layer is a deeper level of energy security.
At the beginning of this year, tensions in the Strait of Hormuz escalated again, amplifying the uncertainty of oil and gas supplies. This serves as a very direct reminder to Gulf countries that have long relied on fossil fuel power generation: energy can be abundant, but not necessarily secure. Against this backdrop, accelerating the development of domestic renewable energy is not just about transformation, but also about ensuring controllability.
With policy support, demand, and security concerns driving growth, the explosive growth of the Middle Eastern photovoltaic market is not difficult to understand. It may seem sudden, but the groundwork had been laid long ago.
02. Orders are surging, but the Middle East market isn't all that easy.
From the perspective of Chinese companies, this surge in the Middle East market has indeed brought long-awaited high-quality growth.
Unlike the past focus on simply competing on price and volume, this time it's more like an upgrade in roles. From CATL and BYD to Sungrow Power and Power Construction Corporation of China, these leading companies are no longer just selling equipment, but are deeply involved in the construction of local energy systems.
For example, Sungrow Power provided a complete system for a 7.8GWh energy storage project in Saudi Arabia. This kind of cooperation is essentially a deeper level of commitment; orders are no longer one-off but rather long-term partnerships lasting for decades or even longer.
But this is precisely where the problem lies. The deeper the commitment, the higher the requirements and the more real the risks.
First, there's the environment itself. The Middle East market may seem sunny and prosperous, but anyone who has actually worked on projects knows it's a challenging environment for equipment. Daytime temperatures exceeding 50°C and frequent sandstorms put long-term strain on components, inverters, and energy storage systems. Once the system experiences reduced power generation efficiency or increased failure rates, maintenance costs will skyrocket. By then, orders signed today could very well become future cost black holes.
Secondly, the rules are changing. Middle Eastern countries are gradually raising the bar for localization. For example, Saudi Arabia government projects generally require a 35%-50% local content ratio (LCR). This means that the simple export model is no longer viable. To secure orders, it's necessary to build factories, bring technology, cultivate local teams, and even participate in the construction of local industrial systems. To put it more bluntly, the Middle East wants more than just products; it wants capabilities.
Finally, there's the variable that many underestimate: uncertainty.
Since 2026, the repeated fluctuations in the Strait of Hormuz have begun to affect project execution. Rising logistics costs and longer transportation cycles have forced some projects under construction to slow down, even resulting in equipment delays and on-site work stoppages.
For large-scale projects often reaching GW levels, delays are not minor issues; missing the grid connection window often leads to exponentially larger losses.
More realistically, many projects require 15 or 20 years of long-term operation and maintenance, meaning engineers not only need to go abroad but also need to stay long-term. In the complex geopolitical environment, this is no longer just a cost issue.
Therefore, on the surface, the Middle East is a booming new market; but at a deeper level, it's more like an upgraded competition. The opportunities are indeed huge, but the barriers to entry are higher than in any previous market.
Conclusion
Looking back from the first quarter of 2026, this surge in Middle Eastern photovoltaic demand is like a magnifying glass. It magnifies not only the increase in orders but also the change in industry logic.
In the past, Chinese photovoltaic exports were more about selling wherever there was demand; now, it's becoming about establishing a presence wherever there's a system. The high growth in the Middle Eastern market is not essentially a simple transfer of demand, but rather the result of a combination of policies, energy structure, and security anxieties.
But precisely because of this, this market will not be an easy place to make money. In a sense, the Middle East is not a safe haven but more like a selection process.
Those who remain will no longer be just the lowest-cost players, but rather companies with strong capabilities in technology, delivery, operations, and globalization.
Therefore, rather than viewing this wave of enthusiasm as an opportunity, it's more accurate to see it as a signal: the overseas expansion of China's photovoltaic industry is shifting from competition based on scale to competition based on capabilities.
