Although China’s domestic photovoltaic installations will likely experience their first full-year negative growth since the era of grid-parity this year, a critical market turning point is not far away, according to industry experts and company executives.
Having endured a wave of installation pullbacks and industry reshuffling in the first half, the sector is bidding farewell to brutal price wars and accelerating a fundamental reconstruction of value, they said.
Yao Yao, chief new energy analyst at Sinolink Securities, said the bottom for both supply chain prices and overall profitability has essentially been solidified.
“With the deepening of electricity market reforms, bidding results in provinces with high solar penetration — such as Gansu and Yunnan — show that solar on-grid tariffs have already hit bottom and are showing signs of rebounding. This return to rational pricing mechanisms will greatly improve the rate of return for power plant projects,” Yao said.
Yao further pointed out that with the implementation of novel consumption models — such as the direct connection of green electricity to computing and data storage centers — alongside the widespread deployment of energy storage to ease grid absorption pressure, domestic demand is highly likely to resume robust growth by 2027.
This forward-looking optimism comes despite a challenging first half, which served as a painful but necessary catalyst for structural adjustment.
The National Energy Administration said newly added domestic solar capacity stood at 72.07 gigawatts in the first six months, dropping over 60 percent year-on-year due to a high comparative base from the 2025 installation rush and temporary grid integration bottlenecks.
Consequently, the supply chain experienced significant financial “bleeding”.
Preliminary reports indicate that 21 listed solar companies anticipate combined first-half losses between 13 billion and 16.8 billion yuan ($1.8 billion to $2.3 billion).
Industry giants — including solar behemoth Longi Green Energy Technology Co, Tongwei Co Ltd and TCL Zhonghuan — faced heavy pressure from supply-demand mismatches, reduced operating rates and complex international trade barriers.
However, this intense consolidation is precisely what is paving the way for a healthier ecosystem, as supply-side “hard constraints” materialize.
Three mandatory national standards governing solar energy consumption and manufacturing efficiency will officially take effect on Jan 1, 2027. Industry analysts project that these strict new entry barriers will force approximately 20 to 30 percent of outdated capacity to gracefully exit the market, accelerating the industry’s clearing process.
“While production across polysilicon, wafers, cells and modules declined year-on-year in the first half, this actually signals that a reversal is imminent,” Liu Yiyang, executive secretary-general of the China Photovoltaic Industry Association, said during a recent industry symposium in Ningbo, Zhejiang province.
Liu urged the industry to transition from competing on sheer scale and price to competing on technology, quality and differentiated advantages.
At the Ningbo event, top executives from major enterprises reached a firm consensus: breaking the cycle of homogenous competition requires a return to the “technological premium”.
Ultimately, driven by recovering supply chain profitability and a renewed focus on premium technical execution, high-quality enterprises equipped with robust technological moats are expected to be the first to break through the current bottleneck, leading the entire solar industry into a new, balanced cycle of high-quality development, they said.
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