China has launched in earnest the drive to curb excess capacity in the solar manufacturing sector, which has doomed many companies to price wars and deepening losses.
The combined losses of six of China’s biggest solar panel and cell manufacturers doubled in the first half of 2025, to $2.8 billion (20.2 billion Chinese yuan), from the same period last year, the Financial Times reports, citing data from local financial information provider Wind.
All top Chinese solar equipment producers had already booked losses for the first quarter of 2025, blaming the continued losses on low product prices and the trade and tariff turbulence under U.S. President Donald Trump.
The Chinese solar wafers, panels, switchers, and other equipment producers have been struggling on the domestic market amid overcapacity that China’s authorities moved to address only in late 2024.
Earlier in 2024, the China Photovoltaic Industry Association said that China urgently needs consolidation in the solar manufacturing industry as overcapacity and price wars are leading local companies to a race to the bottom.
This summer, China’s authorities are stepping up efforts to address the overcapacity in China’s clean technology industries, which undermines the profitability of solar equipment manufacturers.
Chinese authorities have realized that cutthroat competition, overcapacity, and low-quality manufacturing are hurting enterprises. Following months of introducing several measures to try to curb excess cleantech manufacturing capacity, China has now vowed to become more serious in addressing the problem.
Chinese authorities and media have intensified in recent weeks the message that the “disorderly price competition” and overcapacity need to be addressed.
In July, executives from 14 leading Chinese solar firms were summoned by China’s Ministry of Industry and Information Technology (MIIT), where Industry Minister Li Lecheng called on the manufacturers to end price wars, phase out outdated and severely underutilized capacity, and shift toward innovation and value-based competition.
The minister “stressed that the next phase will prioritize product quality, stronger regulations, and sustainable development with ongoing government support,” solar panel manufacturer Huasun said, commenting on the meeting.
By Michael Kern for Oilprice.com
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