Chinese solar power companies shed a third of their workforce last year, amid intense competition and overcapacity that drove losses, Reuters has reported, citing company filings.
Also, last year and this year so far, more than 40 sector players have gone bankrupt, delisted, or been bought by other companies from the industry, the report also said, citing a report from the country’s solar industry association. The layoff numbers stand at a total of 87,000 people, from five of the biggest solar businesses in China.
“The industry has been facing a downturn since the end of 2023,” a Morningstar analyst told Reuters. “In 2024, it actually got worse. In 2025, it looks like it’s getting even worse,” Cheng Wang also said.
The downturn follows three years of frenetic expansion sponsored by the government, which elevated solar to a key industry for economic growth. This expansion resulted in overcapacity, which sank prices and destroyed profits for many.
The government realized the problem last year and took steps to solve it, as the competition for market share has prompted some Chinese manufacturers to sacrifice quality for the sake of higher profits.
The Chinese solar panel market remains oversupplied, and this glut could last up to two more years, one of the top manufacturers, Longi Green Energy Technology, said last year. Longi is one of the companies that laid off a lot of people last year.
Earlier in 2024, the China Photovoltaic Industry Association said that China urgently needed consolidation in the solar manufacturing industry as overcapacity and price wars were leading local companies to a race to the bottom.
A consolidation in the industry with the government’s blessing is one way to prop up the solar industry. Tighter quality standards could also help, by “forcing out outdated production capacity,” per a recent statement by the industry and information technology ministry.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com
