"Anti-inside-spiral" strikes again—yet another "slap in the face," as central state-owned enterprise component centralized procurement sets a "price cap" of 0.66 yuan/W, leaving it once more just "empty talk"?

Since last year, "involution" has almost become synonymous with the photovoltaic industry. Whether it’s silicon materials, silicon wafers, solar cells, or even modules, power plant development, and energy storage systems, prices have repeatedly hit new lows, relentlessly squeezing corporate profits and plunging the entire sector into a quagmire of "homogeneous competition." To reverse this troubling trend, both inside and outside the industry, a wave of "anti-involution" initiatives has been steadily gaining momentum since last year. High-profile companies have held closed-door meetings, industry associations have spearheaded self-regulatory pacts, and leading firms have even signed up for price alliances. Moreover, at the end of last year, "anti-involution" efforts were formally included in government reports, underscoring the profound attention—and commitment—both from the national government and the industry itself.

 

Recently, China Aneng issued a public announcement for the centralized procurement of 200MW photovoltaic modules, setting a price cap of 0.66 yuan/W. Notably, the China Photovoltaic Industry Association had previously emphasized that the minimum bulk purchase price for modules should not fall below 0.69 yuan/W. At first glance, the difference of just 0.03 yuan/W may seem minor—but it underscores once again how reality has harshly dismissed the industry’s efforts to combat "involution." Didn’t the entire supply chain already get involved? Weren’t anti-involution measures jointly launched by six ministries and commissions just days ago? Yet here we are, already facing this stark "slap in the face."

 

I. High Standards and High Expectations for Combating Involution

The photovoltaic industry's call for "anti-involution" is no mere slogan. Since last year, prices across the industry chain have repeatedly plummeted—module prices have fallen below 0.7 yuan/W, while silicon material prices have halved. Even wafer and power plant development segments have been hit hard. In response to this challenging situation, industry associations have repeatedly brought together leading companies to reach a consensus, signing self-regulatory covenants that set minimum industry price floors, thereby preventing "mutual destruction." At the end of last year, the government even explicitly included the initiative to combat involution in its official government report.

As 2025 begins, the push to combat "involution" has escalated to an unprecedented level. In early July, China's Ministry of Industry and Information Technology convened a symposium for manufacturing enterprises in the photovoltaic industry. Meanwhile, the People's Daily even publicly criticized the "photovoltaic sector." By mid-August, six ministries jointly issued a document urging the healthy development of the PV industry while firmly curbing malicious competition. This meeting, which addressed actions across the entire industry chain, marked a higher-profile event than ever before. Such policy signals have once again boosted industry confidence, with many believing that "anti-involution" efforts are finally backed by institutional safeguards.

However, reality shows that even with the joint leadership of six ministries and commissions, it remains difficult to stem the downward trend in prices. After all, at its core, the photovoltaic industry is driven by cost-based competition. And in a context where mechanism-based electricity prices are generally declining—and as a result, power plant profitability is shrinking—any move to reduce costs at any stage is likely to be seen by project developers as a "lifeline."

II. Why did the state-owned enterprise's price cap of 0.66 yuan/W end up being a slap in the face?

This time, the "slap in the face" came directly from the state-owned enterprise itself. As a company backed by a central state-owned enterprise, China Aneng should have set an example by adhering to the industry association’s proposed minimum price of 0.69 yuan/W. However, in its 200MW project, it explicitly offered a capped price of 0.66 yuan/W—effectively and openly undermining the industry’s bottom line.

Why does this situation occur? The reasons are none other than the following:

1) Changes in the electricity pricing mechanism

With Document No. 136 being implemented across provinces, new energy electricity prices have fully transitioned to a model of "mechanism-based power generation + market-oriented trading." In most provinces, the mechanism-based electricity prices are generally 0.05 to 0.1 yuan/kWh lower than the benchmark coal-fired power price. As a result, profitability has declined, forcing developers to maintain their internal rate of return (IRR) by aggressively reducing the cost per kilowatt-hour.

2) Power Plant Construction Cost Structure

In the total investment of photovoltaic power plants, equipment costs account for more than 40%, with modules making up the largest portion. Reducing the purchase price of modules is almost the most direct and effective way to cut costs.

3) Pressure and Performance Assessments for Central Enterprises

Although state-owned enterprises have a guiding responsibility within the industry, they also face pressure to meet performance targets and deliver strong investment returns. In an environment where electricity prices are declining and power plant revenues are tightening, these enterprises are inevitably compelled to pursue even lower investment costs.

Therefore, despite industry advocacy for "anti-involution," state-owned enterprises still find themselves compelled to opt for the lower-priced solutions when it comes to actual project implementation. This also suggests that the so-called "anti-involution" remains largely confined to documents and meetings, making it difficult to translate into tangible outcomes in the competitive marketplace.

III. A Panoramic View of the Industry Chain: Why "Intense Competition" Is Inevitable?

To understand why "fighting involution" is so challenging, we need to look at the entire industrial chain.

1) Silicon material stage

Over the past two years, silicon material prices have experienced significant fluctuations, with an obvious overcapacity issue. Even as leading companies seek to consolidate production capacity, they still find it difficult to avoid price wars amid intense competition.

2) Wafer and Module Stages

This is the most fiercely competitive segment. As technologies like TOPCon, BC, and HJT rapidly evolve, equipment manufacturers and module makers are simultaneously forced to invest heavily in upgrading their production lines—while also struggling to maintain market share amid intense price pressures. There’s virtually no room to catch their breath.

3) Power Plant Development Phase

After the electricity pricing mechanism reform, project profitability has declined. To maintain a reasonable IRR, the only option is to reduce construction costs.

4) Energy Storage Integration

Although energy storage demand is growing rapidly, costs remain stubbornly high, further intensifying investment pressures on power plants. Developers often have no choice but to squeeze prices from components, EPC services, and other links in the supply chain, creating a vicious cycle.

5) The fundamental solution lies in lower electricity prices. We’ve already discussed this earlier, so we’ll just touch on it briefly without repeating the details.

IV. The Dilemma and Way Out of Countering Involution

So, is it possible for the photovoltaic industry to truly "reverse involution"? The answer isn’t entirely pessimistic. The involvement of six ministries and commissions indicates that the national government has already gained a clear understanding of the industry’s involution problem. In the future, more detailed price guidelines, cost regulations, and mechanisms to protect investment returns may be introduced. Meanwhile, the current wave of low-price competition will accelerate industry consolidation. Smaller and medium-sized enterprises with fragile financial chains will gradually exit the market, while larger companies that are well-funded, technologically advanced, and financially stable will survive. In the long run, increased industry concentration will actually help curb malicious competition. And at the heart of breaking free from the price war lies technological innovation. The iterative advancements in TOPCon, the large-scale mass production of HJT, and the ongoing industrialization efforts in perovskite—all have the potential to reshape the future competitive landscape of the sector. Relying solely on photovoltaic power plants, however, is no longer sufficient to sustain industry profitability. Moving forward, integrated solar-plus-storage systems, direct green-power supply models, zero-carbon industrial parks, and virtual power plants are emerging as the key pathways for businesses to unlock new profit opportunities.

To conclude: Beyond empty talk, only hard power matters.

China's photovoltaic industry's "anti-inward competition" has repeatedly fallen into a cycle of "empty talk" and "self-defeating actions." It's not that the industry doesn't want to act—rather, the market environment is simply too ruthless. Amidst electricity reforms and mechanism-based pricing, every company is forced to survive by cutting costs. The state-owned enterprises' price cap of 0.66 yuan/W is merely a microcosm of the industry's deepening struggles. It starkly reveals a harsh reality: when faced with market dynamics, empty slogans and self-imposed commitments ultimately yield to the relentless pressure of genuine competition.

The future of the photovoltaic industry lies not in how many times we shout "fight against involution," but in who can stand out by achieving technological breakthroughs, innovating business models, mastering capital strategies, and fostering seamless collaboration across the entire industry. Only by genuinely strengthening our core competencies can we ultimately emerge victorious in this fierce battle of survival.