(Nov 2): China’s biggest solar companies posted another round of heavy losses, even as improving profit margins hinted that attempts to tackle a chronic industry-wide supply glut might be yielding some results.
Longi Green Energy Technology Co, Jinko Solar Co, Trina Solar Co and Tongwei Co reported a combined net loss of 4.63 billion yuan (RM2.82 billion), according to earnings released on Friday. The results mark the industry’s third straight year in a structural downturn.
Longi’s 1.1 billion-yuan quarterly loss “suggests a long road to recovery amid a downturn driven by persistently low solar panel prices and contracting domestic demand,” Bloomberg Intelligence analyst Chia Chen said in a note. “Heavy overcapacity in China’s solar industry continues to weigh on the outlook and a significant rebound is unlikely before late 2027,” he said.
On a more positive note, the company said on Friday its net loss narrowed on a quarterly basis as more advanced solar panels delivered better margins. This means efforts to tackle a supply glut in the sector are showing some results, according to Citi Research.
“We view Longi’s margin improvement as a positive signal of the industry’s margin recovery, supported by the anti-involution measures taken in the solar sector,” analysts including Air Ma said in a note on Monday, referring to coordinated sector-wide efforts to curb production and avoid price wars.
Still, the quarterly advance has yet to offset entrenched overcapacity. Polysilicon inventories reached a record high at 600,000 tonnes as of August, enough to support more than six months of global wafer production, according to BloombergNEF.
Slowing demand at home and abroad is also making it harder to restore profitability. China’s solar installations plunged 54% in the first nine months from last year, according to data from the National Energy Administration. Most major markets have seen a saturation of solar installations, prompting BloombergNEF to cut its annual installation forecast to 585 gigawatts (GW) from 624GW for 2026. It expects 2027 to be weaker than previously estimated.
“Chinese solar manufacturers are trying to rebuild margins, but weak demand is limiting price increases even after Chinese authorities tightened regulations on solar production,” BloombergNEF wrote in its third-quarter solar supply chain report.
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