Can 200GW of rush installation save the photovoltaic industry? A major test for the industry is coming in 2025

Abstract:

The rush installation of nearly 200GW has not brought good performance, and losses are still the mainstream for photovoltaic companies. The capacity utilization rate of many links is less than 50%, even so, capacity expansion is still in full swing, and the big test in 2025 is truly coming.

 

By | Xiaoyan

Edited by | Bell

→This is the 1567th original article of "Global Zero Carbon"

 

The photovoltaic industry was once a shining star in the new energy field, but in 2024 it fell into an unprecedented "darkest hour."

 

This year, the entire photovoltaic industry suffered losses exceeding 60 billion yuan and has 3 trillion yuan in debt, making it the second-largest loss-making company on the A-share market, second only to real estate.

 

This year, more than 100,000 photovoltaic industry workers have left the entire industrial chain, with bankruptcies, shutdowns, and wage arrears following one after another. Even the once-glorious leading companies such as Longi, JinkoSolar, JA Solar, and Zhonghuan TCL have fallen into the quagmire of losses, and the haze of the industry's cold winter is deeply shrouded.

 

Entering 2025, after two rush installation waves in the first half of the year (April 30 and May 31), the photovoltaic market experienced a brief period of small spring. According to the latest data from the National Energy Administration, From January to May 2025, China's newly installed photovoltaic capacity reached 197.85GW, a year-on-year increase of 150%. In May alone, the country's newly installed photovoltaic capacity reached 92.92GW, a year-on-year increase of 388%.

 

 

However, the "high fever" of nearly 200GW has not brought good performance. The reality of increasing volume but not price has resulted in losses still being the mainstream for photovoltaic companies. Market demand for photovoltaic components has cooled significantly, and component prices have begun to fall again. Trina Solar, JinkoSolar, and Longi's photovoltaic component prices have dropped by about 3-5 cents/watt.

 

Looking ahead to the second half of the year, the rush installation of "eating from the bowl and looking at the pot" has pre-empted demand, and the slowdown in installation will intensify a new round of capacity clearing, with more companies experiencing tight cash flow due to production restrictions and shutdowns. Cases of bankruptcy, restructuring, and equity transfers are starting to increase again.

 

On June 19, the National Enterprise Bankruptcy and Restructuring Case Information Network disclosed two cases of photovoltaic companies undergoing restructuring or compulsory liquidation.

 

One is that in May 2025, the Jian Shui County People's Court of Yunnan Province ruled that Aute Photovoltaic should enter the restructuring process. The other is that on June 14, the Jinnan New Area Market Supervision and Administration Bureau of Handan, Hebei Province, applied to the Magnetic County People's Court for the compulsory liquidation of Magnetic County Huineng Photovoltaic Technology Co., Ltd.

 

Although these two are small companies, they also indicate that the reshuffling of the photovoltaic industry is continuing. After the rush installation, destocking and capacity reduction are expected to remain the main theme in the second half of the year.

 

However, local governments and various capitals are deeply involved in the photovoltaic industry, and the interests involved are complex. The dilemma of choosing between market share and profit has led the industry into a prisoner's dilemma. The market is entering the deep water area of clearing.

 

 

01

2025: After the rush installation, the real test for the industry is coming

 

2024 was considered the most difficult year for the photovoltaic industry. Many people fantasized that 2025 might be better. However, the data from the first quarter shows that companies have not yet escaped the state of losses. The revenue and profits of most companies have fallen sharply, and almost all the main industrial chain links such as components, batteries, and silicon materials have been "injured."

 

The first-tier teams, which serve as a weather vane, are still in a state of loss. In the first quarter, Longi Green Energy's net profit attributable to the parent company was a loss of 1.436 billion yuan; JinkoSolar's net profit attributable to the parent company was a loss of 1.39 billion yuan; JA Solar's net profit attributable to the parent company was a loss of 1.638 billion yuan; Trina Solar's net profit attributable to the parent company was a loss of 1.32 billion yuan.

 

Figure: First-quarter performance of some photovoltaic companies

Source: Jin Card Reading City

 

The most ironic thing is that the current performance is only a summary of the company's stage, and it may be the "best" report card for the industry this year: rush installation shipments, price stabilization, and policy dividends in hand, but even then, they can't get their money back.

 

In fact, after the "rush installation wave" subsides, the domestic photovoltaic market in the second half of the year will face a rapid contraction in demand.

 

Industry insiders generally agree that after "May 31," distributed photovoltaics, especially household photovoltaics, will experience a period of stagnation.

 

With the contraction of demand, prices have also fallen.

 

Since April, all links in the photovoltaic industry chain have fallen, and the current mainstream photovoltaic products have basically returned to the price level at the beginning of the year, and some are even lower. The increase in February and March due to the expected rush installation of April 30 and May 31 has been completely wiped out.

 

After the rush installation wave, various links have returned to the downward price track. Ultimately, this is related to the fact that the industry's excess capacity has not been cleared for a long time. The severe excess capacity, which has not been alleviated much, is suffocating the entire industry.

 

Figure: Recently released photovoltaic supply chain prices by infoLink

Source: infoLink

 

From this round of price decline, although some links still have a slight decline, it is no longer necessary to hold an extremely pessimistic view of the photovoltaic industry. In the difficult process of bottoming out, price fluctuations and repetitions are normal, a large drop is impossible, and a large rise is unrealistic.

 

Overall, China's photovoltaic industry is entering the final stage of this downward cycle. In the second half of the year, the photovoltaic industry will continue to be a state of survival of the fittest, with outdated capacity and technology being eliminated, and high-cost capacity will also be difficult to survive for a long time.

 

It is expected that an improvement should appear in the third or fourth quarter of this year; however, substantial clearing or rebalancing may take longer.

 

 

02

Crazy capacity expansion is still underway

 

At the 2023 SNEC Photovoltaic Exhibition, Li Zhenguo, founder of Longi Green Energy, predicted that more than half of the companies would be eliminated in the next two or three years. If we follow this time estimate, 2025 will be the second year, and 2026 will be the third year.

 

This means that the elimination competition will accelerate.

 

Recently, according to market rumors, the theme of the meeting held last week by the China Photovoltaic Industry Association was still about "limiting production to maintain prices." The photovoltaic industry will usher in a larger-scale production reduction in the third quarter, and the expected operating rate will decrease by 10%-15% month-on-month.

 

Meanwhile, a strict policy against "below-cost sales" has been implemented simultaneously—a third-party special audit team will conduct a comprehensive audit, thoroughly investigating evidence of low-price sales, and taking various measures against violating companies; the sale of "inferior" products will also be rectified.

 

Although the China Photovoltaic Industry Association has refuted this, the emergence of this "short essay" indicates that the situation in the photovoltaic industry remains pessimistic.

 

The other side of production restriction to maintain price is that "overcapacity" is still very serious, which is also the core engine of this crisis.

 

Its appearance is undoubtedly the result of the "frantic" expansion of the photovoltaic industry in the past few years.

 

According to relevant statistics, by the end of 2024, the national silicon wafer production capacity is expected to exceed 1000GW, battery production capacity will exceed 850GW, and component production capacity will exceed 750GW (this is the result after the industry slowed down capacity construction after realizing overcapacity), but according to statistics from various parties, the global market's newly installed capacity in 2024 will be difficult to exceed 500GW.

 

That is, the capacity utilization rate of many links is less than 50%, and the serious overcapacity is undeniable.

 

But even so, capacity expansion is still in full swing.

 

According to statistics from Polaris, since 2025, the total investment in the domestic photovoltaic field has exceeded 28.2 billion yuan, with 16 new expansion projects, a cumulative scale of over 43GW, covering 20GW components, 12GW ingot and wafer, 1GW battery, and 10GW inverters and other core links. Among them, BC and perovskite technologies account for 78% of the share, becoming the absolute protagonists.

 

The production capacity front, which should have been shrinking, at the beginning of the year, completely ignoring the looming sword of Damocles, once again added hundreds of billions of yuan in production capacity. On the one hand, there is a red warning of "overcapacity," and on the other hand, there is "unyielding" frantic expansion. Capacity clearing has become a huge stone blocking the path of the industry, difficult to shake.

 

The emergence of such an "overcapacity disaster" forces us to delve into the truth behind it,

 

 

03

Who is the culprit behind this crisis?

 

In fact, there are many reasons for the occurrence of this "disaster".

 

The first is the explosive growth of demand.

 

In the past few years, after the global community reached the goal of a dual-carbon strategy, coupled with the energy crisis in Europe caused by the Russia-Ukraine conflict, the photovoltaic industry has experienced explosive growth in demand, with tight supply and demand, typical of simultaneous increases in volume and price. It was easy to make money, and every company wanted to "squeeze every last drop," to earn every last penny in every link. Therefore, photovoltaic giants frantically expanded production capacity in hopes of getting a share of the pie.

 

The second is the emergence of non-market resource allocation behaviors.

 

In that era of "machines making money," local governments also saw this opportunity. In order to develop high-quality industries and solve people's livelihood and employment problems, they provided photovoltaic companies with a large number of preferential policies when attracting investment, even providing factory construction, equipment procurement, and "turnkey" preferential investment policies. Under such a friendly business environment, companies' investment intentions were very strong.

 

In addition, unprecedentedly loose financing policies appeared in the secondary market, and the photovoltaic sector ushered in a historic bull market. This financing convenience provided by financial institutions and the capital market made photovoltaic companies almost have unlimited blood packs in those years, frantically financing and expanding production capacity.

 

It was these two non-market resource allocation behaviors that created the honeymoon period of the photovoltaic industry, attracting various companies to cross-border, hoping to take a bite, so a swarm of companies rushed into the photovoltaic industry.

 

The final result is that photovoltaic production capacity surged like a runaway horse, resulting in a serious overcapacity crisis even against the backdrop of rapid growth in global photovoltaic installation demand.

 

However, this crisis of serious imbalance between production capacity and demand had already shown signs in 2023 Q4. Why did capacity expansion never stop?

 

The reasons behind this are complex. On the one hand, the profit-seeking nature of capital is a major reason. The imagination space brought by new technologies such as BC and perovskite has attracted various capitals to enter the market, convinced that technological disruption will inevitably create new market value myths, causing companies to be involved in a repeated cycle of "expansion-financing-re-expansion." On the other hand, although the initial financing of some projects was successfully completed, there was a certain lag in subsequent project approval, record-filing, and approval processes. Even if the current investment environment is turbulent, companies cannot simply step on the "brakes" and can only grit their teeth and move forward.

 

It is these intertwined factors that have caused the total investment in the capital-intensive photovoltaic industry to reach an astonishing figure. According to Black Hawk Photovoltaic statistics, from 2020 to 2024, the total investment in the photovoltaic manufacturing sector exceeded 340 billion yuan.

 

 

04

Photovoltaic capacity clearing has become a "dammed lake"

 

In the brutal reshuffle, photovoltaic companies are suffering from overcapacity, and countless people are looking for answers—when will this round of cyclical fluctuations and market clearing finally settle?

Source: AI generated

 

If the bankruptcy and liquidation of photovoltaic companies is considered a manifestation of market clearing, then small and medium-sized enterprises are indeed on the verge of danger.

 

In the past year, quite a few delisted photovoltaic companies have appeared at the listed company level, such as Dongxu Blue Sky, Aikon Technology, Jiangsu Sunlight, Shouhang High-tech, and Jiayu Shares. The list of companies being ST is still increasing, and Tianyancha data also shows that as of December 2024, 230,000 companies related to photovoltaics have shown abnormalities, including cancellation, liquidation, suspension, and dissolution.

 

However, does this mean that the photovoltaic market clearing has entered the "deep water period"?

 

No, far from it.

 

Currently, the deadlock in photovoltaic market clearing lies in the fact that the vast majority of photovoltaic listed companies still have a lot of money on hand and still have the strength to fight in this cold winter, which undoubtedly prolongs the cyclical front. The power of capital has magnified the power of the photovoltaic cycle.

 

This is because in this cycle, the awareness of photovoltaic companies "stockpiling for the winter" is not too late. In the second half of 2024, the helmsmen of major photovoltaic leading companies mentioned in public: whoever has sufficient cash flow can smoothly weather the cycle.

 

Financial reports show that by the end of the first quarter of 2025, the total cash on hand of 110 A-share photovoltaic companies was 429.245 billion yuan, a decrease of only about 200 billion yuan from the same period last year (Note: delisted companies have been excluded).

 

Perhaps we need to see the bankruptcy of leading companies before we can see the true turning point of the industry.

 

This judgment comes from historical experience. Especially during the reshuffle caused by the "EU and US double anti-dumping" in 2012, well-known veteran photovoltaic leading enterprises such as Wuxi Suntech and Jiangxi Saiwei did indeed collapse.

 

However, so far in this cycle, there has been no sign of leading companies collapsing, but the concentrated losses also show that the financial reports of many leading companies have entered an "ice age", so it is still difficult to say who will win.

 

When we re-examine the photovoltaic industry, we find that the changing times have completely changed the past appearance of photovoltaics.

 

The problems in the photovoltaic industry are not all caused by the photovoltaic companies themselves. The problems are inseparable from the disorderly local industrial investment promotion, the disorderly expansion of capital seeking profit, and even the disorderly regulation of various parties in the industry, possibly coupled with the single economic growth model and the unfavorable impact of the macroeconomic environment. Now it seems that it is probably not only photovoltaics that are sick.

 

If this cycle will bring any benefits to China's photovoltaic industry, and what gifts the intense cyclical fluctuations can leave for the photovoltaic leaders, then the most crucial should be "industry awakening" and "development consensus".

 

China's photovoltaic industry is not only a high-quality industry, but also one of the typical representatives of new productive forces, and it must not be "sold at a cabbage price". Unprincipled competition in production capacity, market share, and price is "meaningless"; this not only endangers the healthy development of the industry but will also greatly affect China's global competitiveness in photovoltaics.

 

Experiencing cycles is a necessary path for Chinese photovoltaic companies, especially leading companies, to achieve "lasting success." It compels them to return to the fundamentals of business and deeply embed "cyclical culture" in their organizational genes.