"After Dominating 80% of the Global Market... China’s Solar Industry Hit with 3 Trillion Won Losses"

Supply-Demand Imbalance, Shrinking Demand, and Trade Barriers Weigh on Market

Combined Losses of Top Three Solar Firms Exceed 2.16 Trillion Won

Chinese Authorities Raise Entry Barriers and Begin Industry Restructuring

China's solar power industry, which has been fostered as a strategic sector by the government, posted multi-trillion won losses in the first half of this year.

Solar panels are operating at a solar power base located in northern Inner Mongolia, China. Photo by AP Yonhap News.

On July 26, Yonhap News, citing Chinese business media outlet Caijing, reported that the combined losses of 21 listed Chinese companies in the solar sector, which recently released their preliminary earnings, reached between 13 billion and 16.8 billion yuan (approximately 2.8 trillion to 3.6 trillion won). Losses were reported across nearly the entire supply chain.

In particular, the combined losses for the first half of the year for the so-called solar industry "big three" — LONGi Green Energy, Tongwei, and TCL Zhonghuan — surpassed 10 billion yuan (about 2.16 trillion won). These three companies also recorded net losses for 10 consecutive quarters up to the first quarter of this year.

The contraction in demand has been especially severe. In the first four months of this year, new solar installations in China totaled 50.9 GW, down by about 50% compared to the same period last year. Caijing analyzed that this shift was due to a base effect from a surge in installations in the first half of last year, coupled with a shortage of new energy consumption. As a result, domestic installation volumes entered a period of adjustment this year, and revenue in the module manufacturing sector also declined.

Solar energy, along with electric vehicles and batteries, has been one of the "new three products" (新三樣·Xin Sanyang) strategically fostered by Chinese authorities. Among them, China accounts for about 80% of the global solar market. While all three industries have experienced rapid growth in a short period, a glut of competing companies, overproduction, and cutthroat price competition have led to weakened profitability and side effects such as trade friction.

Industry worries are growing. Wang Bohua, former secretary-general of the China Photovoltaic Industry Association, commented at the recently held "2026 First-Half Solar Industry Review and Outlook Symposium" that "the domestic industry is facing a triple squeeze of supply-demand imbalance, shrinking demand, and stronger trade barriers," adding that "a severe adjustment phase is dragging on."

Liu Yiyang, executive secretary of the China Photovoltaic Industry Association, stated, "The industry's fundamental 'inward competition' (內卷式·Neijuan) has not changed," but added that the recently announced "compulsory national standards" could help alleviate excessive cutthroat competition. These national standards, jointly announced last month by three ministries including the Ministry of Industry and Information Technology, will take effect in January next year. They require the elimination of the lowest-performing 20–30% of market participants who fail to meet technical criteria.

This content was produced with the assistance of AI translation services.