By using a firm-level dataset and a comprehensive array of up-to-date methods, this paper at first estimates the production function and total factor productivity (TFP) of the photovoltaic industry in China. Then this paper compares the annual growth rate of this industry with those of the others in order to judge its development. What’s more, this paper checks the influences, individually and collectively, of factors that may possibly affect the photovoltaic industry. As a result, the state-share and scale of an enterprise will affect its TFP significantly, while the other factors fail to make a difference. However, it is interesting to find that while R D alone cannot impact TFP, its interaction with state-share proves to improve TFP notably. At the end of this paper some advisable suggestions intended to upgrade the current development of the photovoltaic industry are offered.