Currently, energy development and utilisation are facing two problems in China: the energy crisis and the effects of global warming. An important means to solve the above problems effectively is to increase the intensity of the development and utilisation of photovoltaic system, which directly transforms the inexhaustible solar energy into the powerful green electrical energy. However, some problems plague the development of the photovoltaic industry. Due to these problems, the photovoltaic industry is seriously hindered in its efforts to develop sustainable. Therefore, accurately understanding the developing situation of the photovoltaic industry and analysing and solving the problems that occur during the development process of the photovoltaic industry in China are important topics of current research. This paper presents research results regarding these topics. First, this paper considers the present situation of the photovoltaic industry in China from three aspects: the power market, power generation industry policy and power generation technology level. Second, a discussion of the existing problems of the above three aspects is presented; in addition, based on the developing trends of renewable energy in China, development orientation of the photovoltaic industry are identified for years to come. Finally, strategies are proposed to promote the rapid development of the distributed photovoltaic industry in China.