Ending the damaging price war may require fundamental reform. How did the industry get here, and how can it recover?
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Sluggish sales mean many factories in the PV supply chain are only producing at around 50% of their total capacity (Image: Imaginechina Limited / Alamy)
or Chinese solar photovoltaic (PV) manufacturers, things are going from bad to worse. Recently published third quarter reports showed that many of the largest players are posting significant losses as they continue to compete in a vicious price war.
In its most recent earnings report, JinkoSolar, one of the titans of PV manufacturing, reported a 23% year-on-year (YoY) decline in revenue and a 37.1% YoY decline in profit. JinkoSolar is not alone, according to Bloomberg (£): Longi Green Technology, a leading panel-maker, reported its fourth straight quarterly loss, while Tongwei, Trina Solar, and JA Solar Technology also reported losses.
This dynamic is not new. Prices for every segment of the PV supply chain have been falling since early 2023 and have now reached such a low level that manufacturers are selling modules below the cost of production, meaning they lose money on each additional module sold. Western governments have also imposed steep tariffs on Chinese panels, further cutting into their bottom line.
Chinese regulators and industry associations have been trying to stop this freefall, but have so far been unsuccessful. In a 30 July meeting, China’s Central Committee called for the strengthening of industry self-regulation and criticised anti-competitive behaviour.
The Chinese Photovoltaic Industry Association (CPIA) responded to this by proposing a price floor in mid-October. Though the CPIA is an industry group rather than a government entity and has limited influence, Chinese anti-monopoly law states that selling commodities below cost can be illegal. The price floor followed a May 2024 meeting with solar industry heads and government officials, during which the CPIA raised the possibility of more direct government intervention. “It would be better to use the market to resolve current industry difficulties, but government measures can also play an important role,” it said.
