The once-booming Chinese solar industry is now navigating turbulent skies, both literally and figuratively. At the recent SNEC PV Conference in Shanghai, which usually sets the tone for global solar advancements, industry sentiment was visibly subdued. A combination of plummeting prices, shrinking export markets, and growing overcapacity has sent shockwaves through the sector.
A startling one-third of China’s 121 publicly listed solar manufacturers are operating at a loss. More than 50 companies across the solar supply chain have declared bankruptcy in 2025 alone. The price collapse has been dramatic solar panel component costs dropping by 60% to 80% in 2024 compared to the previous year. Trina Solar’s chairman, Gao Jifan, reported a staggering US$40 billion loss just within the photovoltaic value chain, extending to US$60 billion when including other operations.
The once-glamorous names Longi, Jinko, JA Solar, and Tongwei have all seen their share prices fall between 30% 80 80 80% since 2022. Even the global leader by shipment volume, Jinko Solar, has seen its stock slump over 60%. As the domestic market saturates and a price war deepens, companies are facing existential questions.
Tariffs, Trade Wars, and Desperate Diversification
Amid this financial strain, US tariffs are adding salt to the wounds. With levies as high as 3,521% on Chinese-made solar panels, including those routed through Southeast Asia exporting to the lucrative American market, it has become nearly impossible. Attempts to sidestep tariffs by producing in Southeast Asia are now blocked too, forcing a rethink of global strategy.
Many Chinese firms are pivoting to “localisation” strategies, establishing production bases in the Middle East, Africa, and parts of Europe to maintain global competitiveness. However, these efforts are not without hurdles. Complex supply chains, heavy capital requirements, and regulatory challenges make full overseas relocation a difficult feat. While downstream processes like module assembly are relatively easier to relocate, upstream elements like raw material processing remain heavily China-dependent.
Even amid a 90-day tariff truce between the US and China, uncertainty looms. “Simply exporting isn’t enough; you must also localise production abroad,” said Gao Jifan at the SNEC conference. Chinese solar industry data suggests that nearly 80% of future capacity expansions are now being redirected outside Southeast Asia to avoid punitive tariffs.
Green Hope or False Dawn? Pivoting to Energy Storage and Hydrogen
In search of a lifeline, many solar firms are diversifying into adjacent cleantech sectors like energy storage systems and green hydrogen. Giants like CATL, BYD, and Longi are investing in lithium battery systems and electrolyser technologies. However, this new frontier is not without its oversupply problems and profitability challenges.
“Everyone is suffering,” admitted Cao Hui, general manager of REPT Battero Energy, highlighting that even the battery storage market is battling price collapses and excess capacity. The hydrogen sector, despite strong policy support, has yet to achieve commercial viability.
Amid these headwinds, Chinese solar industry veterans are urging consolidation. Zhu Gongshan, chairman of GCL Group, called for a supply-side overhaul by March 2026. Yet meaningful mergers or acquisitions remain rare due to widespread financial distress.
With both overcapacity and geopolitical tensions threatening the solar dream, the path forward is uncertain. Analysts warn that the era of hyper-growth is over. What remains to be seen is whether China’s solar giants can weather the storm or fade under clouded skies.
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