China's solar industry losses are shrinking due to overcapacity, says an association
According to data presented by a representative of an industry group, losses in China's slumping Solar sector have decreased in the third quarter as the government's 'war on industrial overcapacity' has targeted manufacturers.
According to data from earlier this season, the solar industry has reached a level of capacity that can satisfy global demand by roughly two times. This is why Beijing is focusing on it as part of its efforts to reduce industrial production in this year.
According to Wang Bohua's presentation, honorary chairman of China Photovoltaic Industry Association, industry losses decreased by 46.7% from July to September. However, they still totaled 6.422 billion Yuan ($911.9 millions)
NEW MANUFACTURING CAPABILITY DOWN, Future Demand Uncertain
Wang, speaking at a business event in Xian (northwestern China) on Wednesday, said that the number of new factories was lower than last year. He did not give any figures.
The presentation revealed that in the first 10 month of this year the output of finished modules and solar?cells rose by respectively 9.8% and 135%, while the polysilicon industry reduced its production by 29.6%.
Wang cited a number of regulations that were passed in 2025. He said these included limits on energy consumption for polysilicon plants. This, he claimed, was forcing the closure of less efficient capacity.
He said that new government guidelines aimed at expanding renewables use outside the power sector will support the demand.
A representative of the industry ministry, speaking at the event, reiterated calls by government to tighten control over manufacturing capacities and shut down obsolete production lines by 2026.
Sinolink Securities analyst Yao Yao, who spoke at the event, said that China's demand may fall dramatically next year. He cited its most pessimistic scenarios. He said that new installations will reach a record of 285 gigawatts in this year, and range from 185 GW up to 275 GW by 2026.
Solar developers could face challenges if the market-based pricing is implemented.
The chairman of the?leading manufacturer Longi Green Energy remains optimistic.
Zhong Baoshen, a Chinese energy expert, said that China's demand would definitely surpass 300 GW within the next five-year period.
If domestic demand falls short of expectations, this could increase the need for companies to look overseas for new markets.
Wang's presentation revealed that the export of finished modules, the majority of solar exports in January to October, increased by 6%, despite the fact that the value of all solar exports dropped 13.2% due to lower prices. (Reporting and editing by Joe Bavier; Colleen howe)
(source: Reuters)
