The deadline of "531" has passed, and the photovoltaic industry is directly facing the off-season.

Chen Wen, reporter of China's Strategic Emerging Industries Media

Capacity clearing and layoff pressure are the cruel elimination competitions that the photovoltaic industry is currently facing.

Judging from the successively released 2025 Q1 reports, among the 138 listed photovoltaic companies, 56 experienced annual losses, accounting for 40%. Among them, the top ten photovoltaic giants—such as Longi Green Energy, Tongwei Co., Ltd., JA Solar, TCL Zhonghuan, and Trina Solar—accumulated losses exceeding 520 billion yuan. Across the industry, 101 companies experienced a year-on-year decline in gross profit margin, accounting for 73%; 17 companies had negative gross profit margins.

Even more cruel are the cold layoff figures. According to the 21st Century Business Herald, excluding delisted companies, the total number of employees in 109 A-share photovoltaic companies in 2024 was 638,700. In 2023, this figure was 782,600. May 31st is a key date. The policy deadline of Document No. 136 has arrived. Although some companies temporarily "recovered" by raising product prices and rushing to install projects at the end of 2023, the photovoltaic industry will still face a more severe market environment.

>>A photo taken on June 6th shows the Suofang New Energy Base in Hangjin Banner, Ordos City, located in the Kubuqi Desert (drone photo). In the Kubuqi Desert and the Ulan Buh Desert, the "photovoltaic desertification control" model is widely used, and patches of "blue sea" brimming with "green energy" have appeared in the sea of sand. Xinhua News Agency reporter Lian Zhen

Layoff storms sweep the entire industrial chain

From 2020 to 2023, the photovoltaic industry chain investment exceeded 2.5 trillion yuan, driving global capacity to soar to 1000GW in 2023, while the actual demand that year was only 400GW. In the first half of 2024, the new energy materials business sector entered a state of irrational price competition, with the cost reduction speed lagging behind the market price decline. The result is that the personnel turmoil in the photovoltaic industry in the past year has been unprecedented. According to statistics, since 2024, the number of layoffs in the photovoltaic industry has exceeded 140,000. Among them, Longi Green Energy reduced its workforce by about 37,000, Trina Solar by about 23,000, and both Canadian Solar and JA Solar laid off about 13,000 each. This layoff wave has swept the entire industrial chain, from silicon materials and silicon wafers to battery plates and components, without exception. At the end of last year, Gao Jifan, chairman of Canadian Solar, described this cycle as the "most severe challenge" ever faced by the Chinese photovoltaic industry, highlighting its wide coverage, large scale, and profound impact. Li Zhenguo, founder and president of Longi Green Energy, frankly stated in an interview with Caijing Magazine that in the past, they always thought about changing the world, but today his personal feeling is that "the top priority is to keep the company alive, keep this platform running continuously, and then have the ability to change the world." On August 2, 2024, Shen Haoping, the "soul figure" of TCL Zhonghuan, the king of monocrystalline silicon in the upstream of the photovoltaic industry, suddenly resigned as CEO, causing a stir in the photovoltaic industry. TCL Zhonghuan, which had been profitable for 12 consecutive years, successfully won the title of "loss king" in the photovoltaic sector with a huge loss of 9.818 billion yuan. Six consecutive quarters of losses have almost wiped out the company's profits from the previous three years. Data shows that TCL Zhonghuan's total revenue in the first quarter of 2025 was 6.101 billion yuan, a year-on-year decrease of 38.58%; its net profit attributable to the parent company was a loss of 1.906 billion yuan, a year-on-year decrease of 116.67%. In 2024, the annual revenue was 28.419 billion yuan, a year-on-year decrease of 51.95%, and the net profit was a loss of 10.806 billion yuan. Despite the losses, TCL Zhonghuan still maintains the industry's leading position in silicon wafer market share (23.5%), with a photovoltaic monocrystalline capacity of 190GW and a year-on-year increase in product shipments of 18.3%. Having tasted the bitter fruit of almost aggressive counter-cyclical expansion, TCL Zhonghuan is attempting to urgently shift to contraction, adopting contraction strategies such as reducing capital expenditure, selling non-core assets, optimizing operational efficiency, and restructuring its business structure. In addition, Longi Green Energy, a dual leader in silicon wafers and components, also suffered its first annual loss since its listing. The company's annual revenue was 82.582 billion yuan, a year-on-year decrease of 36.23%, and its net profit was a loss of 8.618 billion yuan, a year-on-year plunge of 180.15%. Amid the overall industry downturn, there are still bright spots in specific segments. The inverter leader, Sungrow Power Supply, increased its number of employees from 13,000 to 17,000 in 2024, a year-on-year increase of 26.3%. The number of employees at companies such as Aero Energy, Deye, Jinlang Technology, and Northern Huachuang also increased year-on-year. The common characteristic of these companies is that auxiliary material and equipment companies are less affected by the price war in the main chain and have a high proportion of overseas orders, becoming a "safe haven" during cyclical fluctuations.

Shifting to new tracks such as new energy vehicles and energy storage

In stark contrast to the current situation, the photovoltaic industry once conducted large-scale recruitment over the past 10 years, with Longi, Trina Solar, and Tongwei significantly expanding production and experiencing a sharp increase in the number of employees. Data from the International Renewable Energy Agency (IRENA) shows that the global photovoltaic industry employed more than 4.5 million people in 2023, an increase of more than 200% compared to 2015. As the world's largest photovoltaic market, China accounted for more than 85% of the global workforce in 2023. From 2021 to 2023, the global photovoltaic new installed capacity compound growth rate exceeded 20%, and companies continuously recruited to meet capacity needs. The China Photovoltaic Industry Association pointed out that in 2023, the total number of photovoltaic employees in China was approximately 7.1 million, accounting for 44% of the global total. Household photovoltaics directly provided approximately 2 million jobs and indirectly supported 5 million. Among them, Longi Green Energy's total number of employees in 2023 exceeded 75,000, and Canadian Solar, JA Solar, and Tongwei Co., Ltd. each added more than 10,000 employees annually. Now, during the industry downturn, after rounds of "personnel optimization" to reduce costs, there seems to be an atmosphere of unease everywhere within photovoltaic companies—in break rooms, OA systems, and WeChat groups. It is worth noting that this "reshuffling" has affected research and development engineers, sales, HR, legal affairs, and even fresh graduates. The "golden offer" of a monthly salary of 20,000 yuan for fresh master's graduates has been invalidated overnight, and rumors of "death seats" for photovoltaic HR are widely circulated in the industry. These people were once the backbone of the industry. Now, they are sharing "People's Republic of China Labor Law" rights protection strategies in layoff groups, and some are transforming into photovoltaic bloggers and self-media to seek a second curve. More people choose to leave the industry and turn to "new tracks" such as new energy vehicles and energy storage. The photovoltaic industry is no longer an "iron rice bowl"—according to BOSS Zhipin data, the turnover rate of photovoltaic employees in the first quarter of 2024 increased by 230% year-on-year, with a surge in the number of people switching to energy storage and new energy vehicles. From the high-salary "talent grab" to the collective unemployment of photovoltaic people, the rise and fall of the photovoltaic industry is truly lamentable.

How to reverse the plight of photovoltaics

Faced with industry crisis, the government and industry associations have taken action to try to rescue the industry. In October 2024, the China Photovoltaic Industry Association issued a series of price and production restrictions: releasing monthly guidance prices for component costs and calling on the industry to resist price competition below cost; organizing 33 photovoltaic companies to sign a self-discipline pact to implement quota-based production restrictions starting in 2025. On November 6, 2024, the Ministry of Industry and Information Technology (MIIT) issued the "Normative Conditions for the Photovoltaic Manufacturing Industry (2024 Edition)", raising the energy consumption of polysilicon, water consumption of silicon wafers, and efficiency thresholds for cells and modules. In terms of energy consumption standards, the new policy requires that the energy consumption of existing production capacity be limited to below 60 degrees/kg, and the threshold for new production capacity be limited to 53 degrees/kg. The export tax rebate policy has also been adjusted. On November 15, 2024, China reduced the export tax rebate rate for the photovoltaic industry from 13% to 9%. This adjustment has increased the operating pressure on small enterprises but provided integration opportunities for leading enterprises. The "Document No. 136" issued at the end of 2023 stimulated a rush to install photovoltaic systems. The income of existing projects will remain relatively stable, while new projects will not enjoy the "protection umbrella" of fixed electricity prices after entering the market and face the risk of declining income. Many companies chose to connect to the grid in advance before the deadline. Guotai Junan Securities analysis shows that under the influence of the policies on the full entry of distributed and new energy sources into the market, the industry experienced a temporary increase in demand and rapid decline due to the rush to install in the first half of 2025, and the prices of midstream and downstream industries fluctuated accordingly. Taking 182-specification TOPCon as an example, according to infolink, the battery/component prices rose to 0.31/0.75 yuan/W, an increase of 11%/5% compared to the end of 2024. Then, as the policy deadline approached, demand declined. As of May 21, the battery/component prices fell to 0.255/0.68 yuan/W, with a year-to-date fluctuation of -9%/-4%. In the first half of the year, the average gross profit margin of the battery/component sector once recovered to near or even above the breakeven point. However, with the decline in industry chain prices, profitability has returned to a relatively stressful period this year. As of May this year, the battery sector has been losing money for over a year. According to SMM data, the cumulative winning capacity of photovoltaic components in the first three weeks of May was only 0.34 GW, the lowest three-week cumulative winning capacity since 2023. If this trend is linearly extrapolated, the monthly procurement scale may show a significant decline compared to the normal monthly average level of the industry. For reference, the average monthly winning capacity of photovoltaic components in 2024 was 24.41 GW, while the average monthly winning capacity in the first quarter of 2025 was 18.24 GW. In other words, the rush to install and ship in the first quarter of 2025 did not bring good results, and losses are still a common reality for photovoltaic components. The grid's absorption capacity is still a bottleneck. The instability of wind power and photovoltaics limits the grid's acceptance capacity, while the speed of grid transformation cannot keep up with the rapid growth of new energy installations. At the same time, the price risk brought about by the marketization of electricity may also affect the internal rate of return of photovoltaic installations. He Haoyun, from the CITIC Futures Research Institute, believes that the core of "Document No. 136" is to promote the full participation of new energy projects in the electricity market trading mechanism, and the electricity price formation mechanism has shifted from the previous "fixed price + subsidy" model to market-based pricing. Due to the coincidence of photovoltaic power generation peaks and low valley periods of spot electricity prices (typically during the midday), the project's rate of return is significantly under pressure. Although the policy framework has clarified the deadline for the implementation of provincial-level detailed rules by the end of 2025, key parameters such as the scale of price difference settlement electricity and the policy implementation cycle have not yet been uniformly determined. The vacancy period of policy details has significantly increased the uncertainty in the economic calculation of projects, objectively suppressing the investment decision-making willingness of project entities, resulting in the current market demand contraction. It is expected that short-term installation demand will continue to maintain a weak pattern. Starting from the end of the third quarter, with the release of concentrated demand at the end of the year, installations may have marginal improvement, but the problem of insufficient total volume remains difficult to change. The photovoltaic industry, which has been suffering from losses, has had to face a more deserted off-season after the ebb of the rush to install. This has caused serious concerns in the industry: if profits cannot be made even during the policy dividend period, the development of enterprises will be even more difficult after the policy dividend ends. The challenge of market-based transactions is before new energy power generation enterprises. As Longi Green Energy Chairman Zhong Baoshen said: "2024 was the most difficult year for Longi in the past decade." For many companies, this may be the worst year in the past decade, but it may also be the best year in the next decade. Currently, the main photovoltaic industry chain has been losing money for nearly a year. Enterprises are strengthening cash management through methods such as production based on sales and scale reduction, while increasing financing efforts. However, the financing capabilities of enterprises are differentiated. Considering that the asset-liability ratio of most enterprises has reached more than 70%, it is expected that the financing capacity of second- and third-tier enterprises will be limited in the future, and the pressure on funds and debt repayment will gradually become prominent. Looking ahead, Guotai Junan Securities believes that industry market-based clearing and enterprise self-discipline cooperation, together with the policy coordination and supervision of relevant government departments and regulatory agencies, are expected to help reverse the photovoltaic predicament.

Reprinted from China Strategic Emerging Industries