Current Status Of China's Photovoltaic Industry

After the "suicidal involution", the latest data of the photovoltaic industry is: in the first ten months of this year (January-October 2024), prices fell by 60% to 80%, production increased by 20%, and revenue decreased by 43.17%. Giants Longi Green Energy and Tongwei Co., Ltd. lost more than 10 billion yuan. At the same time, companies went overseas at prices below cost to eliminate the volume, causing almost all countries to boycott or sanction our photovoltaic products. Even Cao Renxian, chairman of the Photovoltaic Industry Association, found this situation incomprehensible. At the annual photovoltaic industry conference just held, he said: "I often ask these companies why they do this? Do you want to force others to death, or do you think this is the last gamble?" To be honest, I don't understand it either!

From the perspective of online sentiment, China is also very disgusted with the "suicidal involution" of the photovoltaic industry!

The good news is that since November, the government and photovoltaic companies have been actively adjusting, and a series of policies are pushing the photovoltaic industry back on track.

In recent years, China's photovoltaic industry has repeatedly set new records. The scale of solar power installed capacity exceeded 793 million kilowatts in October 2024, a year-on-year increase of 48%. The proportion of grid-connected power generation has reached 24.8%, successfully surpassing wind power and hydropower to become China's second largest energy source. This not only reflects the profound changes in China's energy structure, but also brings unprecedented opportunities for the development of the photovoltaic industry.

In the past few years, although the photovoltaic industry has grown rapidly, it has always been plagued by overcapacity. "Involution" competition has led to an increasingly fierce price war, and many small and medium-sized enterprises have fallen into the quagmire of inefficient production. In order to change this situation, the government and industry associations have frequently taken action recently.

The Central Economic Work Conference held on December 12 clearly proposed to accelerate the construction of new energy bases and promote zero-carbon parks and national carbon market systems. At the same time, the rectification of "involution" competition has been put on the important agenda, aiming to avoid vicious competition among enterprises and promote the healthy development of the industry through policy norms and market regulation.

Immediately afterwards, the National Energy Administration reiterated at the National Energy Work Conference on December 15 that it is necessary to vigorously promote the development and utilization of photovoltaics and clarify the strategic goal of coordinating new energy and ecological protection.

At the same time, self-help actions within the industry are also being promoted. The China Photovoltaic Industry Association convened 33 companies to sign an industry self-discipline convention, promising to control production capacity and eliminate vicious price wars. The attitude and actions of leading companies in the industry indicate that the industry is reshaping order and capacity clearance is expected to accelerate.

With policy support, market adjustments, and corporate self-discipline, the photovoltaic industry seems to have stood at the starting point of rebirth. But the real question is whether this series of measures can really curb the "involution"? Can vicious competition really be completely eliminated? Is this transformation of the photovoltaic industry an opportunity for the rise of the industry, or a short respite?

The market will eventually give the answer. In the future, only those companies that truly have technical strength and actively embrace green transformation will have the last laugh.