Chinese solar companies are facing substantial financial difficulties, with 22 out of 26 photovoltaic enterprises reporting total losses ranging from $2.5 billion to $2.9 billion in the first half of the year. This widespread "bleeding" affects the entire industrial chain, from silicon materials to modules, as evidenced by major players like LONGi Green Energy expecting losses of $468 million to $520 million, and TCL Zhonghuan anticipating losses of $412 million to $453 million. Only four enterprises remained profitable, none of which are on the main photovoltaic industrial chain, highlighting the severe price war impacting core manufacturers.
The decline in domestic demand is a significant factor, with new photovoltaic installed capacity in China dropping 66.1% year-on-year in the first half of 2026. This sharp deceleration is partly attributed to a high comparison base from a "rush-to-install" period in the previous year and the introduction of new electricity price policies that rendered many projects economically unviable. For example, new project electricity prices in Shandong at $0.036 per kWh and Guizhou at $0.046 per kWh are too low for projects to be profitable.
Overcapacity is a persistent problem, with global photovoltaic production capacity estimated at 1400GW, while actual demand is only around 500GW, resulting in a capacity utilization rate of less than 40%. The supply-demand ratio for components like silicon wafers, cells, and modules exceeds 2:1. This imbalance, combined with a significant reduction in China's export value-added tax (VAT) rebate for photovoltaic products in April 2026, has further suppressed prices and margins for Chinese solar manufacturers. Bloomberg also noted that Chinese solar stocks were "whipsawed" by domestic efforts to curb overcapacity and renewed US tariff threats.
JinkoSolar, a major global module maker, reported a net loss of $102.8 million in the second quarter of 2026, with revenue down 31.3% year-over-year. Despite a 16.7% sequential increase in module shipments to 15.9 GW, gross profit fell 49.6%. In response, JinkoSolar cut its full-year 2026 shipment outlook to 60-70 GW, prioritizing profitability and cash flow over volume, a strategic shift reflecting the industry's challenging environment. Total losses for listed Chinese solar companies in 2025 topped an estimated $7.3 billion, with top six manufacturers losing an additional $2.8 billion in a single quarter in late 2025, according to SaurEnergy.
