China’s solar firms are bleeding and winning at once
Author: PPD Team Date: March 24, 2026
China’s solar industry is undergoing its sharpest downturn in over a decade, with global implications for prices, supply chains, and competition. A March 2026 brief by the Center for Strategic and International Studies (CSIS) states that price erosion, excess capacity, and rising trade barriers are disrupting the sector while reinforcing China’s structural dominance.
The CSIS brief, authored by Michael Davidson and Sandy Qian, identifies oversupply as the central issue. In 2024, global photovoltaic (PV) manufacturing capacity exceeded installation demand by more than two times, according to the International Energy Agency (IEA). Module prices declined by 50% in 2023 and a further 25% in 2024, while polysilicon prices fell over 70% in 2023 and another 40% in 2024.
The downturn has triggered consolidation. China’s five largest solar firms, Jinko Solar, Trina Solar, JA Solar, LONGi Green Energy, and Tongwei, reduced their combined workforce by over 30% last year. More than 40 smaller firms have exited, been acquired, or shut operations. In December 2025, Chinese regulators introduced a fund aimed at retiring nearly one-third of low-efficiency polysilicon capacity.
China retains supply chain lead
Despite industry stress, China’s dominance across the PV value chain remains intact. In 2024, it accounted for 93.2% of global polysilicon production, 96.6% of wafers, 92.3% of PV cells, and 86.4% of modules, as per China Photovoltaic Industry Association data.
China has also strengthened its position in solar technology. Its share of global solar patent filings reached about 65% in 2024, up from 13% in 2004. The sector has rapidly adopted tunnel oxide passivated contact (TOPCon) technology. LONGi Green Energy holds the global efficiency record for perovskite/silicon tandem cells at 34.85%, according to the National Renewable Energy Laboratory’s January 2026 chart.
Pressure on non-Chinese manufacturers
Falling prices are placing significant strain on manufacturers outside China. European and United States (U.S.) producers, with cost structures 50% to 100% higher than Chinese imports, are facing closures despite policy support. Norwegian Crystals ceased operations in 2023. Meyer Burger shut its Germany facility in 2024 and its U.S. plant in 2025.
Policy direction and outlook
The CSIS brief states that competing with China on current-generation cost structures is not feasible in the near term. It recommends focusing industrial policy on next-generation solar technologies, particularly beyond-tandem innovations where supply chains are still emerging. It also cautions that broad non-China sourcing mandates may weaken domestic industry competitiveness.
The brief concludes that the ongoing consolidation is not creating space for new global leaders. Instead, it is resulting in a more efficient and technologically advanced Chinese solar industry with deeper integration into global supply chains.
Source for images: Center for Strategic and International Studies (CSIS), based on GACC and Ember.
