Billion Losses No Sunshine: China's Solar Market Continues to Fail Due to Its Own Strategy

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China's solar industry dominates the global market—and yet reports billion-dollar losses. The aggressive low-price strategy, which drove out Western competitors for years, is now putting its own manufacturers in a precarious position.

Despite a high number of new installations, the situation in the photovoltaic industry remains tense. The five leading Chinese companies in the sector, JinkoSolar, Longi Green Energy, JA Solar, Trina Solar, and Tongwei, collectively incurred over eight billion yuan in losses in the first quarter of 2025, as reported by NenPower. This amounts to a little more than 1.08 billion U.S. dollars. Already in the third quarter of 2024, several of these companies had reported significant losses or suffered a sharp decline in profits.

The number of globally installed solar panels continues to grow significantly. The International Energy Agency (IEA) reported at the end of 2023 that the cumulative globally installed capacity had reached an estimated 1,640.0 GW. The largest manufacturers also report that they delivered 65 GW of modules in the first quarter of 2025 alone (via PV Tech). Nevertheless, the solar market has been difficult for years. Massive overcapacities and brutal price competition from Chinese manufacturers have contributed to the crisis.

Fight for Market Share Instead of Profit

JinkoSolar recorded a loss of around 1.39 billion yuan (about 192 million U.S. dollars) with a 40 percent drop in revenue. The reasons cited are low prices along the entire value chain and international trade barriers. Longi, on the other hand, reported a loss of 1.44 billion yuan (about 199 million U.S. dollars), despite increased prices in March—though these remained below production costs. JA Solar suffered the largest loss among module manufacturers with 1.64 billion yuan (about 227 million U.S. dollars), although significantly less than in the previous quarter. This is also the case for most other Chinese solar manufacturers.

The massively decreased module prices are straining overall margins. On average, prices have dropped from 1 Yuan/Wp to 0.70 Yuan/Wp. Wp stands for Watt-peak and refers to the nominal power of a solar module under standardized test conditions.

The massive price decline along the entire value chain, triggered by overcapacities, aggressive competition, and fluctuating international demand, has been putting Chinese suppliers in a tight spot for years. With their volatile low-price strategy and heavily subsidized overproduction, they have driven many Western competitors out of the market over the years. Today, these companies lack economically viable prices—the race for market share has turned into a structural loss-making business.

US Customs Policy Slows Down

Additionally, new US tariffs on solar products from Southeast Asia significantly hinder the export of Chinese manufacturers to the USA. Even though double-digit market growth is expected in regions such as the Middle East, Africa, and Asia-Pacific, the global recovery of the industry remains uncertain. Accordingly, market consolidation continues to progress: smaller providers are quitting or being acquired. Although industry associations are now calling for "rational pricing" and more discipline, analysts remain skeptical that this will actually happen. Market leaders like Jinko and Longi even hope for government intervention, such as production limitations.

Conclusion: China's solar industry is currently experiencing the late effects of years of striving for market dominance through price and scaling. What originally pushed Western competitors out of the market now threatens to become an existential crisis for its own model. The energy transition increasingly depends on an industry that is undermining itself. (sb)

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