Five major manufacturers warn of up to $5.5 billion in 2025 losses as oversupply, rising costs, and trade barriers deepen pressure on the sector
China’s leading solar panel makers are bracing for a second consecutive year of steep losses, with five of the country’s biggest firms forecasting combined net losses of between 34.2 billion and 38.4 billion yuan ($4.9 to $5.5 billion) for 2025. The bleak outlook, disclosed in stock exchange filings, underscores the severity of the industry’s ongoing struggle with overcapacity and the rising cost of raw materials, even as solar installations continue to grow at a rapid pace. Analysts say the results will test the effectiveness of Beijing’s “anti-involution” campaign, aimed at curbing destructive price competition in the sector.
The companies forecasting losses include TCL Zhonghuan Renewable Energy, Trina Solar, Longi Green Energy Technology, JA Solar Technology, and Tongwei. The lower end of the projected loss range would already surpass the record 33.5 billion yuan loss reported in 2024, signaling that the industry’s pain is not easing. Despite China’s massive expansion of solar power capacity, the surge in installations has been overshadowed by an even larger influx of manufacturing supply, as firms race to tap into government incentives and global demand. This imbalance has intensified competition and driven prices down, cutting deeply into profits across the industry.
The scale of China’s solar expansion is striking. By the end of November, installed solar capacity in the country reached 1.16 terawatts, a 41.9% increase from the previous year, according to the National Energy Administration. Yet this rapid growth in demand has not kept pace with the explosion of supply. Companies such as Tongwei have openly acknowledged that the “temporary oversupply problem has not yet been alleviated,” predicting a loss of 9 billion to 10 billion yuan—potentially the largest in the sector. JA Solar also highlighted the issue, attributing ongoing losses to the concentrated release of production capacity across multiple segments of the photovoltaic industry chain and the resulting intensification of competition.
Trade barriers have added further strain. Several companies pointed to intensified international trade protection policies as a key factor affecting profitability. The United States, for example, has imposed import duties on solar cells and modules from countries where Chinese firms have shifted production to circumvent previous tariffs. These policies have made it harder for Chinese manufacturers to export products competitively, squeezing margins and reducing global market access. This pressure has coincided with rising costs for key raw materials, including silver, which recently surpassed $90 per ounce. Trina Solar said that while photovoltaic product prices increased in the second half of the year due to industry efforts to combat “involution,” the rapid rise in raw material costs, including silicon and silver paste, caused profitability in its module business to decline.
The market reaction to the loss forecasts was immediate. Shares of Trina Solar fell 9% following the disclosure, as investors grappled with the likelihood that the sector’s financial pain will continue into 2025. The broader industry is also watching to see whether China’s anti-involution campaign can restore stability. While new solar installations slowed in the second half of the year, they picked up again in November, and companies have begun exploring consolidation and coordination efforts to stabilize supply. Several firms, including Tongwei, formed a new company in December that analysts believe could be used to manage upstream polysilicon supply. In addition, TCL Zhonghuan announced plans to acquire struggling solar panel producer Das Solar, reflecting a broader trend toward consolidation as companies seek to survive the oversupply environment.
The coming months will be crucial for determining whether these measures can effectively reduce excess capacity and bring the industry back to profitability. With China ending export tax rebates for photovoltaic products from April 1, the government is also attempting to curb a further drop in export prices and reduce the risk of trade friction. However, analysts warn that implementation of production cuts will be difficult, especially if companies revert to higher output when prices rise. As the solar sector navigates these pressures, the ability of major manufacturers to return to profit will be seen as a key test of whether China’s anti-involution strategy can succeed, or whether the industry will continue to be trapped in a cycle of oversupply and losses.
The Sri Lanka Guardian is an online web portal founded in August 2007 by a group of concerned Sri Lankan citizens including journalists, activists, academics and retired civil servants. We are independent and non-profit. Email: editor@slguardian.org
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