Zhu Gongshan: Cyclical fluctuations will not change the overall growth trend of the photovoltaic industry

 

On June 10, the 18th (2025) International Solar Photovoltaic and Smart Energy (Shanghai) Conference and Exhibition (hereinafter referred to as "2025SNEC") was held in Shanghai. Zhu Gongshan, Chairman of the Global Green Energy Council, Chairman of the Asian Photovoltaic Industry Association, Co-chairman of the SNEC Photovoltaic Storage Hydrogen Industry Alliance, Executive Chairman of the SNEC PV+ International Photovoltaic Conference, and Chairman of Xinyi Group, attended the conference and delivered a speech, pointing out that cyclical fluctuations will not change the overall growth trend of the photovoltaic industry.

 

 

The following is the content of the forum speech

 

 

Marked by the annual SNEC conference, over the past year, the photovoltaic industry has undergone systematic reshaping amidst intense pain, with "major changes" and "major reshuffling" coexisting, elimination and new growth occurring simultaneously, and deep differentiation and dynamic integration unfolding at the same time. As a core variable in the major changes in the industry, Chinese photovoltaics, facing short-term difficulties such as full-chain pressure, supply and demand shifts, and trade barriers, is driving industrial revolution through technological generational upgrades, promoting competition upgrading through bottom-up integration, and promoting capacity clearing through industry self-discipline. It is shifting from scale expansion to value upgrading, from reliance on a single market to breaking through the global market, and simultaneously achieving a historical transformation in its development role.

 

Cyclical fluctuations will not change the overall growth trend of the photovoltaic industry. ‌ In 2024, global new photovoltaic installations exceeded 600GW, a year-on-year increase of more than 30%, and the total installed capacity of photovoltaic power generation exceeded 2.2TW, basically on par with coal-fired power generation, and is expected to significantly surpass it by the end of the year. In 2024, China's new photovoltaic installations reached 278GW, with a total installed capacity of 887GW, and its position as the second largest power source continues to be consolidated. "Photovoltaic and storage go hand in hand" has driven the total installed capacity of new energy storage projects to reach 73.8GW/168GWh, a year-on-year increase of more than 130%. A market pattern of single-polar dominance and multipolar resonance in the global photovoltaic industry is being established: Chinese photovoltaics, with about 1% of GDP, has contributed more than 85% of the full-chain products and solutions to the world; the European photovoltaic market, represented by Germany and Spain, shows strong resilience; the United States has continuously selected photovoltaics as the primary source of new power generation for many years; major markets in Asia-Pacific, such as India and Pakistan, are deepening; the Middle East, including Saudi Arabia and Turkey, has become a new growth pole; and emerging markets in Africa and Latin America are rising gradually. The combined effect of incremental demand in traditional markets and potential in emerging markets is expected to push the total global photovoltaic installed capacity to reach 5200-5800GW by 2030. Among them, the total installed capacity of the four major photovoltaic markets of China, Europe, the United States, and India could reach 3300-3800GW, and China's total photovoltaic installed capacity could reach 1800-2300GW.

 

Last year, I spoke here about, "The photovoltaic industry is experiencing not a cyclical iteration every three to five years, but a rehearsal before the arrival of the era of major changes in photovoltaics." In 2000, Germany enacted the Renewable Energy Act, which for the first time established a positive cycle mechanism of "policy-market-technology" for the photovoltaic industry. In the past 25 years, the photovoltaic industry has undergone multiple rounds of adjustments, including policy-driven, capacity expansion, investment overheating, clearing and integration, technology-led, and systematic balance, and has essentially completed several cyclical baptisms into adulthood. The once "supplemental energy" has grown into a leading force in green and low-carbon development, and the "golden boy" who once relied on policy support has transformed into a "sunshine youth" running on the carbon-neutral track. The "photovoltaic evolution theory" simultaneously presents three changes:

 

First, the industry evolution curve has undergone a mutation. From the previous linear growth within the cycle, with wave-like fluctuations every three to five years, it has evolved into a spiral upward trend with an unpredictable cycle.

 

Second, the logic of market development has been rewritten. In the past, it was policy-based, with priority consumption and guaranteed price and quantity. Now, it is fully market-oriented, with full electricity entering the market and floating returns, with "market rate of return" driving a new model for industry optimization and development.

 

Third, the boundary attributes of the industry have been extended. Photovoltaics has evolved from a purely power generation role to a hub connecting energy production, storage, and consumption, expanding from a "single power generation grid-connected model" to a "grid-connected and off-grid diversified power supply" model, and the market is no longer judged solely by grid-connected capacity.

 

Against this backdrop, we need to clearly recognize that the series of major changes taking place in the photovoltaic industry are essentially the result of the resonance of three variables: technology, market, and policy: technological iteration accelerates the elimination of backward production capacity, market mechanisms reconstruct the return model, cross-border integration expands value boundaries, and drives photovoltaics to transform from a "participant in the energy revolution" to a "zero-carbon system architect." Instead of expecting a cyclical recovery of photovoltaics, it is better to face the disruptive reconstruction of the industry head-on.

 

Currently, Chinese photovoltaics is at the critical point of "four falls and five rises," having experienced the industry pain caused by oversupply in all aspects. Practitioners should reflect on this and precipitate a "photovoltaic involution reflection record"—the photovoltaic industry is not a zero-sum game battlefield, but a community of life with shared destiny. Short-term profit-seeking and piling up production capacity have no way out; only building an ecosystem with long-term goals has a future. Homogeneous competition will only squeeze the industry's survival space; differentiated strategies are the key to breaking the deadlock. The cost reduction of photovoltaic products has its physical and technological limits. Extreme cost reduction and extreme competition at the cost of reasonable profits are tantamount to drinking poison to quench thirst, which will inevitably suppress innovation, worsen the competitive ecosystem, and affect the "dual carbon" process. In particular, intellectual property rights, mainly embodied in patents, are the lifeblood of photovoltaics. The case of TOPCon exhausting its technological dividend in just two years cannot be repeated. We must give technological innovation the attribute of rights and extend the industry's dividend cycle.

 

At the same time, we should also be pleased to see that "industry pain" is accompanied by "industry fortune." For more than a year, the triple filtering of technology, capital, and market has driven an increase in the concentration of the photovoltaic industry, raising the entry barriers and value dimensions—photovoltaics is no longer a capital game that any player can participate in, but a professional competition that has been adhered to for decades with passion, pioneering with dedication, winning with innovation, generating electricity with care, and making reasonable profits.

 

The confirmed "dual carbon" process has determined that the photovoltaic industry will maintain linear growth for a certain period. Globally, photovoltaics remain one of the energy forms with the most prominent technological and economic advantages. The energy the sun delivers to the Earth every second is equivalent to approximately 5 million tons of coal. More than 150 countries worldwide have proposed carbon neutrality or zero-emission targets. The essence of the carbon neutrality process is an energy revolution, and a series of natural advantages, including technology, cost, and environmental benefits, make photovoltaics the best carrier for this revolution. The energy payback period for photovoltaic power is only 1.3 years, and with FBR carbon chain components, this can be reduced to less than 6 months. Calculated over a 30-year lifespan, the remaining 29.5 years are net-zero emissions. Grid parity for photovoltaics and storage, or even LCOE below the threshold for thermal power, is driving market penetration, parallel development of photovoltaics and storage, and independent grid connection. In the next 5 years, the global demand for energy transformation and the urgent need for electricity for approximately 750 million people without access to electricity will drive massive investment demand in the new energy industry, with about half potentially flowing into the photovoltaic sector. From a trend perspective, it took 68 years for global photovoltaic installations to reach 1 terawatt, but the second terawatt took only two years. A third terawatt is expected soon. Even considering fluctuations in policy and financing environments, trade barriers, and other factors, linear growth and even exponential growth in photovoltaics remain highly probable.

 

The confirmed technological singularity has determined that the photovoltaic industry will systematically unlock a low-carbon future. Photovoltaics have achieved grid parity from the generation side to the user side for four or five years. With the introduction of relevant policies as a watershed moment, photovoltaics have now entered an era of comprehensive market-based hard grid parity. The arrival of the technological singularity has driven photovoltaics directly into a new era of productivity characterized by low cost and low carbon resonance. The mass production breakthrough of perovskite solar cells marks the arrival of the photovoltaic technological singularity. The golden combination of FBR granular silicon + BC + perovskite technologies outlines a new picture of photovoltaics for the next ten years.

 

First, the convergence of three generations of peak technologies is driving a complete transformation of the photovoltaic industry chain—low energy consumption and low carbon footprint for source materials; high efficiency, high premiums, and high profitability for intermediate battery components; and low investment, low cost, low land occupation, and high return rates for downstream power generation. Perovskite and silicon tandem cells have a theoretical efficiency 50% higher than traditional components, 20% lower cost, and a carbon footprint reduction of over 50%. The combined effect of power generation, cost, and green premiums conservatively estimates an increase in revenue of at least 20 billion yuan for a 1GW component over its entire lifecycle. According to the COP28 target of global photovoltaic installations in 2030, if tandem components are used in the future, the photovoltaic industry will unleash huge market growth. With the mass production of gigawatt-level production lines and industry chain optimization, the LCOE of perovskite is gradually catching up with that of crystalline silicon. Once fully applied, it can perfectly "borrow land from the sun" and "virtually expand" the Earth's capacity by at least one-third.

 

Second, this round of photovoltaic technological singularity is not isolated but rather involves parallel development of photovoltaics and storage, grid synergy, AI collaboration, and chain reactions. Photovoltaics have entered the "post-silicon era." The future will not be an extension of the past; the "silicon dominance" will evolve into a synergistic relationship between silicon, lithium, and carbon, with multiple materials working together. The three technologies complement each other and integrate their performance, promoting the full commercialization of long-duration energy storage within five years, increasing the photovoltaic-storage ratio of large-scale power plants to around 10:7, and significantly expanding the photovoltaic-storage market. In addition, superconducting grids for global energy interconnection and AI-based precise prediction and instantaneous dispatch provide core support for building a new power system based primarily on wind and solar power.

 

Third, the core of this round of photovoltaic technological singularity is the full-chain, cross-border green and low-carbon transformation. China aims to reduce its energy consumption per unit of GDP by 3% in 2025. Strengthening policy constraints and market incentive mechanisms will inevitably require the photovoltaic industry to be guided by ESG principles, focusing on low-carbon sources, carbon reduction during the process, carbon control at the end, and recycling. Photovoltaic technology iteration, carbon value is a key indicator, driving industry chain value migration, market rational calibration, and redistribution of manufacturing profits. As the scope of carbon footprint regulations rapidly expands, outdated technologies and production capacities that cannot meet carbon value requirements will inevitably be eliminated by the market. In 2024, the premium income from green electricity trading contributed approximately 3 billion yuan in profit to photovoltaic projects in China. Looking ahead, the "four green extensions" of green silicon-green electricity-green hydrogen-green chemicals will reconstruct the energy and industrial value chains, creating an imaginative market space.

 

The confirmed application expansion has determined that the photovoltaic industry's applications are boundless and its prospects are limitless. In terms of large-scale applications, the combination of large-scale bases in deserts and gobi areas, integrated source-grid-load-storage systems, and the coupling of new energy with high-energy-consuming industries has become the mainstream. By 2030, China's total installed capacity in desert and gobi areas may exceed 500 GW, and deserts such as Kubuqi, Ulan Buh, Tengger, and Badain Jaran will become super-large ecological photovoltaic towns. In 2025, China's total grid investment is expected to exceed 800 billion yuan. During the 14th Five-Year Plan period, ultra-high-voltage channels will be intensively put into operation, distribution networks will continue to be upgraded, and cross-regional power transmission capacity will be significantly improved. National grid synergy and the free flow of green electricity will empower various industries. In terms of ubiquitous applications, cross-border applications of photovoltaics can contribute more than 50% of industry profits. In China alone, by 2030: photovoltaic installations in the transportation sector could exceed 50 GW, cumulative installations of BIPV in the building sector could reach around 150 GW, and photovoltaic installations in the industrial sector could exceed 200 GW, with high-energy-consuming industries such as steel, chemicals, and data centers driving approximately 60% of industrial photovoltaic demand. It is particularly noteworthy that "off-grid photovoltaic power" cross-border supply is expected to account for more than half of photovoltaic power generation. Green electricity, green certificates, and carbon markets will work together, and green electricity will gradually become more widely used to produce green hydrogen, green methanol, and green ammonia. Digital energy technologies will drive in-depth interaction between power electronics and materials science, and the combination of photovoltaics and energy storage and virtual power plants will optimize profit models under a three-dimensional trading system of "long-term + spot + ancillary services." In the future, any surface that can bear sunlight can become "photovoltaic skin."

 

The trend of photovoltaics is unstoppable, and in the midst of destruction and creation, it restarts the future. The future of photovoltaics is certainly bright, but the darkness before dawn is the hardest to endure. Currently, overcapacity in all aspects remains a sword of Damocles hanging over our heads. From clearing overcapacity to ecological reconstruction and stable development, photovoltaics still have a long way to go in their transformation. The second half of this year and the first quarter of next year are a critical window period for supply-side reform in the photovoltaic industry, and we need to work together to push the industry onto a path of high-quality development. As a veteran of the industry, I would like to take this opportunity to make three proposals:

 

First, government-enterprise collaboration to promote capacity reduction. Reduce overcapacity through "market-based mergers and acquisitions + technological elimination mechanisms + policy constraints," and reduce inventory through "supply-side self-discipline + demand-side stimulus." Integrate photovoltaic capacity indicators into the national planning framework, with registration and verification, capacity monitoring, and the elimination of violators, implementing full-chain supervision. Strictly control new capacity, except for disruptive new technologies. Avoid unreasonable local protectionism and prevent "clearing while increasing." Establish a national adjustment fund for the new energy industry to promote the restoration of the industry's ecosystem. Historically, every improvement in the supply and demand situation and price of polysilicon has invariably led to the prosperity of the entire industry chain. Starting with the material end to integrate and clear out ineffective and excess production capacity can restore the prices of silicon materials and components to a reasonable range, bringing the annual output value and profitability of the entire industry chain back to normal levels, and significantly increasing export earnings.

 

Secondly, a green grading system for value determination. Introduce a photovoltaic green value grading system, such as "dark green" and "light green," to prevent low-quality products from competing with high-quality ones on price. This will allow new technologies, products, and paradigms with high technology, high efficiency, and high quality, especially those leading in carbon value, to take center stage. Introduce differentiated green financing, carbon finance, IPO, and export tax rebate policies. Incorporate full-cycle carbon value into the preconditions for photovoltaic power grid connection, breaking down high-energy-consumption production function combinations, and dispelling the common perception of photovoltaics as 'energy-intensive before energy-saving.' Expand the consumption scenarios and proportion of green certificates, improve the carbon footprint accounting system and database construction, and ESG rating mechanisms, promote international alignment, mutual recognition, and trust, and make China's low-carbon technology standards an important part of global green trade rules.

 

Thirdly, fostering synergy and creating new opportunities. Create cross-industry technology and standard integration consortia to break down barriers for cross-sectoral photovoltaic applications. Change the distorted value situation where the manufacturing attributes of photovoltaics are greater than their technological attributes, forming a development closed-loop of "R&D investment - technology premium - profit reinvestment," allowing China's photovoltaic industry to transition from simply exporting production capacity to a combination of "technology standard export + localized production capacity." For photovoltaic companies that break through "bottleneck" technologies, open a green channel for relevant national-level honorary selections, and encourage and support photovoltaic scientists to become leading figures of the times.

 

Distinguished leaders and colleagues, China's photovoltaic industry, after more than two decades of hard work, has completed a relay race of growth and transformation on a global scale. The journey has been filled with both joys and hardships, and the achievements are hard-earned and deserve the wholehearted care and love of all photovoltaic professionals. Currently, it is a critical time for the industry to return to its roots and purify itself. While combating involution, we must also be wary of malicious dumping by cross-border capital and establish an industrial defense line for fair competition. We also hope that our media institutions will continue to embrace the overall situation and guide all sectors to view industrial transformation in the context of the new power system construction from a higher perspective, focusing more on solutions and less on problems. The problems remain the same old problems; what we need most is to find solutions through these problems, build confidence, see the future, and create the future. To achieve China's carbon neutrality goal, an average of 500-700 GW of new photovoltaic installations are needed annually, while the theoretical future growth space for global photovoltaics is far beyond imagination. This golden track of dancing with light awaits our joint efforts to unlock the future. Let us continue to strive for a more beautiful tomorrow for our blue planet and the community of shared future for mankind, pursuing light tirelessly and striving endlessly!

 

Source: China Energy News