by MA Yueran
China's solar industry is entering a prolonged adjustment after more than a decade of rapid growth, as upstream output contracts and long-running price competition erodes profitability across the sector.
The shift was in focus on Dec 18 at the 2025 photovoltaic industry annual conference, where WANG Bohua, honorary chairman of the China Photovoltaic Industry Association (CPIA), said the sector was undergoing not just cyclical change but a deeper structural transformation.
Unlike previous years, the CPIA did not release a forecast for solar installations in China for next year in its annual report, a move that reflects heightened uncertainty over demand, pricing and policy direction.
The slowdown is most visible at the upstream end of the supply chain. According to CPIA data, polysilicon output fell 29.6% year on year in the first ten months to about 1.11 million tonnes, marking the first annual decline since 2013. Wafer output also dropped 6.7% to 567 gigawatts, the first such contraction since 2009.
Downstream manufacturing segments expanded volumes. Cell output rose 9.8% to 560 gigawatts, while module production increased 13.5% to 514 gigawatts, underscoring the persistence of capacity expansion despite weakening margins across much of the industry.
Demand remained volatile. China added 252.87 gigawatts of new solar capacity in the first ten months of the year, up 39.5% year on year, but growth was sharply front-loaded. Installations surged early in the year amid policy incentives, before falling more than 50% in the third quarter as those effects faded. A modest rebound followed toward year-end as auction results were finalised and large-scale base projects progressed.
Exports have helped absorb part of the industry’s surplus but have not reversed pricing pressures. From January to October, export volumes of wafers, cells and modules rose 8.3%, 91.4% and 6% respectively, while export value fell 13.2% to $24.42 billion. Africa stood out as a growth market, with module exports reaching 15 gigawatts, alongside 2 gigawatts of wafers and 2.5 gigawatts of cells, though prices there weakened in the second half.
At home, prolonged price wars have left much of the core manufacturing chain operating at a loss. Prices across the supply chain fell sharply in the first half of the year before stabilising after mid-year regulatory moves aimed at curbing sales below cost.
CPIA data show losses across the core supply chain reached 31.04 billion yuan in the first three quarters. While the industry remained firmly in the red, third-quarter losses narrowed 46.7% from the previous quarter to 6.42 billion yuan, offering what officials described as an early sign that tighter discipline was beginning to take effect.
Industry groups have made curbing excessive competition a central theme this year. The CPIA has called for stronger self-discipline among companies, warned against bidding below full costs in project tenders and backed moves to consolidate excess polysilicon capacity through market-based mechanisms.
Regulators have also signalled a tougher stance. YANG Xudong, an official at the Ministry of Industry and Information Technology (MIIT), said authorities would strengthen capacity controls, price monitoring and enforcement against illegal pricing and quality violations, while accelerating the orderly exit of outdated capacity.
Looking ahead, analysts expect the adjustment to extend into next year. Sinolink Securities estimates new solar installations of 185 to 275 gigawatts in 2026 under different scenarios, implying China's first year-on-year decline in solar additions in years under current policy settings.
Industry officials say the current downturn does not mark the start of a long-term decline, but rather a painful transition away from growth driven by scale and price competition towards a model that prioritises profitability, quality and more sustainable expansion.
