Seeking Solutions<\/h2>\n
China\u2019s production capacity has doubled \u00a0global demand\u00a0 for solar panels, causing prices to plummet. Large companies within the sector have even sought state assistance to remain afloat. Faced with an unsustainable situation of \u00a0losing money\u00a0 on every sale, a coalition akin to an \u00a0OPEC\u00a0 for photovoltaics was formed: the \u00a0China Photovoltaic Industry Association (CPIA)\u00a0, with 33 major manufacturers committing to practices of \u00a0self-control\u00a0.<\/p>\n
In December last year, key executives convened to seek solutions following years of price wars. Recently, the \u00a0SNEC PV & ES Expo 2025\u00a0 took place in Shanghai, bringing together manufacturers and companies worldwide to assess the global market’s condition. While it remains to be seen what measures will be taken, participants are clear that the current situation is untenable.<\/p>\n
Collaboration is Key<\/h2>\n
As stated by Zhu Gongshan, President of the CPIA, \u201cThe solar industry is not a \u00a0zero-sum game\u00a0. We are in this together, and the extreme cost-cutting and fierce competition are akin to drinking poison to quench one’s thirst.\u201d In \u00a02024\u00a0, China installed approximately \u00a0278 GW\u00a0 of solar capacity, comprising nearly \u00a060%\u00a0 of new installations globally.<\/p>\n
This overcapacity contributed to a staggering \u00a060% drop\u00a0 in solar module prices between 2020 and 2024. At the December meeting, one of the measures agreed upon was a minimum price recommendation to safeguard profit margins, which has shown modest success in early \u00a02025\u00a0 with a slight uptick in prices.<\/p>\n
Adjusting Production Rates<\/h2>\n
The CPIA projects an installation of \u00a0215 to 255 GW\u00a0 for this year, a cutback compared to last year’s output. Nevertheless, the current installation pace remains staggering; from January to April alone, \u00a0105 GW\u00a0 was added\u2014\u00a075%\u00a0 more than the same period last year.<\/p>\n
Expectations suggest that installations may see a \u00a044% drop\u00a0 in the latter half of \u00a02025\u00a0. A significant policy change enacted by the government on June 1 stipulates that new solar plants will sell their output at market prices rather than guaranteed tariffs.<\/p>\n
Innovative Solutions Required<\/h2>\n
\u201cInstead of waiting for a cyclical recovery, we must face a \u00a0disruptive restructuring\u00a0 in the sector,\u201d Zhu asserted. Several proposals are being floated, such as enhancing \u00a0government-private collaboration\u00a0 to regulate supply through legislation or mergers.<\/p>\n
Another approach involves investing in \u00a0technological innovation\u00a0 for either solar panels or the production chain, allowing for sustainable growth and \u00a0higher profit margins\u00a0. This means reducing wall-to-wall production of panels anchored to rapidly outdated technology. The focus should instead be on improving quality while controlling output, maintaining higher prices, and avoiding market saturation.<\/p>\n
![\"China](\"https:\/\/teknomers.com\/en\/wp-content\/uploads\/2025\/06\/1750051868_736_China-has-come-so-close-to-dying-from-success-with.jpeg\"\/)
\n <\/div>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\nChanging the Mindset<\/h2>\n
Another challenge is that there are many factors to consider. The 33 CPIA member companies are not the only manufacturers; some may not adhere to self-control agreements. Compounding these internal challenges are the significant tariffs imposed by the United States.<\/p>\n
Under the Trump administration, tariffs on Chinese solar panel imports soared to \u00a0over 3,500%\u00a0, alongside a \u00a060%\u00a0 tax on materials like \u00a0polysilicon, wafers\u00a0, and solar cells from China. As highlighted by Gao Jifan, president of \u00a0Trina Solar\u00a0, to adapt to these tariffs, the response from China should pivot toward \u00a0internationalization\u00a0. \u201cDue to tariffs, exporting alone isn\u2019t sufficient anymore; production localization overseas is necessary,\u201d he remarked.<\/p>\n
The outcomes of these strategies remain to be seen. However, the intention to curb market saturation signifies a crucial turning point, and the idea of relocating production may ignite renewed competition, reminiscent of the automotive industry\u2019s battle for attracting manufacturers.<\/p>\n