China’s Photovoltaic Industry Faces Structural Overcapacity but Expects Short-Term Rebalancing
The Ministry of Industry and Information Technology (MIIT) recently commented on the current state of China’s photovoltaic (PV) industry, acknowledging a stage-specific and structural overcapacity risk. However, official statements emphasized that this expansion falls within the normal cyclical development range of a fast-growing market.
This assessment drew widespread attention during the China International Photovoltaic Industry Conference, where key stakeholders gathered to discuss long-term industry health, market consolidation, and technology roadmaps.
Industry Leaders Address Overcapacity & Market Equilibrium
Liu Hanyuan, Chairman of the Board of Directors at Tongwei Group, emphasized that while market competition remains intense, healthy competitive pressure drives manufacturing efficiency and technological iteration. Liu expects the current overcapacity to find market equilibrium within a short timeframe (6 to 12 months):
“There is no need to worry excessively; let the market manage market dynamics, while government policy provides macro guidance to address structural supply shifts.”
Major Regional Partnerships & Investment Commitments
During the conference, municipal governments and leading PV manufacturers finalized strategic investment agreements exceeding 50 billion RMB. Major projects across Chengdu, Leshan, and Meishan were formally signed, accelerating the buildout of Sichuan Province’s Leshan–Meishan Photovoltaic Industrial Corridor.
Fostering a Healthy Competitive Ecosystem
Throughout executive forum discussions, industry leaders highlighted the necessity of avoiding aggressive, low-margin price wars that undermine long-term R&D:
- Liu Hanyuan (Tongwei Group): Urged participants to foster a collaborative corporate ecosystem that avoids redundant capital expenditure and destructive internal price competition.
- Zhong Baoshen (LONGi Green Energy): Emphasized that relentless cost reduction and module efficiency gains through technological innovation remain the primary drivers for lowering the levelized cost of electricity (LCOE).
- Cao Renxian (Sungrow): Highlighted robust global demand dynamics, pointing out that while rapid capacity expansion introduces operational challenges, clean energy adoption continues to break global records.
- Gao Jifan (Trina Solar): Outlined key risks associated with rapid capital deployment, including rapid equipment depreciation in a fast-evolving technological landscape.
Global Trade & Cross-Border Collaboration
Addressing international trade barriers, domestic leaders reiterated China’s role in supplying high-efficiency clean technology to meet global carbon-neutrality targets. Deeper commercial and technical exchanges with key markets—including Europe, North America, Japan, and South Korea—remain vital for accelerating international renewable transitions.
Next-Gen Cell Technology Competition
Prof. Martin Green, widely recognized as the “Father of Photovoltaics,” shared insights on the ongoing cell architecture transition. As traditional P-type PERC cell market share declines, competition among N-type architectures is accelerating:
- TOPCon (Tunnel Oxide Passivated Contact): Rapid mass adoption and high current line throughput.
- HJT (Heterojunction Technology): Superior temperature coefficients and high conversion potential.
- IBC / ABC (Interdigitated Back Contact): Preferred by Green for its long-term aesthetic and efficiency ceiling benefits, especially across residential and commercial rooftops.
Summary
While supply chain overcapacity presents short-term margin compression across the PV manufacturing sector, continuous technological iteration—paired with scalable lithium battery storage solutions and advanced hybrid inverters—continues to lower total system costs, driving long-term adoption of integrated solar energy systems worldwide.
