China’s efforts to reduce overcapacity in the solar manufacturing sector looks to have yielded the first results as domestic firms narrowed their losses in the third quarter.
The solar manufacturing industry in China slashed total losses by 46.7% in the third quarter from a quarter earlier, according to the China Photovoltaic Industry Association.
The industry still booked a total loss of $912 million (6.422 billion Chinese yuan), per a presentation by the Wang Bohua, honorary chairman of the association, as carried by Reuters.
Chinese manufacturers slashed polysilicon production by 29.6% and cut silicon wafer output by 6.7% between January and October, Wang said, although production of solar cells and finished solar modules still rose year-over-year.
Reduced losses could be the first sign that the government policy to address bloated capacity is working.
To compare, all top Chinese solar equipment producers 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 stepped up efforts to address the overcapacity in China’s clean technology industries, which undermines the profitability of solar equipment manufacturers.
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Technology (MIIT), where Industry Minister Li Lecheng called on the manufacturers to end price wars, phase out outdated and severely underutilized capacity, and shift toward innovation and value-based competition.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 Tsvetana Paraskova for Oilprice.com
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