China has been so close to dying with its solar panels that has made the only logical decision: manufacture less

China is a colossus in the photovoltaic industry segment. They are not just installing huge parksbut dominate production with iron. So much that they have made The whole world depends on its technology and collapsed the price of the panels, drowning European and American manufacturers. The result of the crazy expansion was An internal price warbut after years of losses in the domestic market, they already propose a solution.

Manufacture fewer panels.

Storm. In 2020, China presented a zero emission plan Net for 2060. The goal is reduce your considerable carbon footprint and pollution and, for this, They marked That in 2030 there should be at least 1,200 GW of solar and wind capacity installed. The energy began to act, but companies from other sectors saw that there was a lucrative opportunity and got into the business.

The result? Market saturation and such a beast production of the modules that were drowning foreign companies, but also to the domestic market. If 1,200 GW of renewables installed in 2030 were needed, only the solar installed in 2024 already surpassed The 880 GW.

To the search for solutions. Production folded world demand And prices crashed, with huge companies in the sector asking the State for help To be able to continue in business. In that unsustainable situation for your own industry because They lost money with each salea kind of OPEC For Chinese photovoltaic, the Chinese photovoltaic industry association, or CPPO, with 33 of the main manufacturers signing a self -control commitment.

The meeting was held in December last year and its executives are still looking for solutions after years of price wars. This week the Snec pv & is expo 2025 In Shanghai, in which manufacturers and companies around the world have met to evaluate the global situation. And, although we have to wait to see what measures they take, the Asian association of the photovoltaic industry – one of the organizers of the event – is clear that it cannot be followed in this situation.

Or we refer to one or sink. As we read in South China Morning Post“The solar industry is not a zero -sum game,” said Zhu Gongshan, president of the association, in the inauguration speech. “We are in this together and the extreme cost of costs and fierce competition are not different from drinking poison to calm thirst,” he said. China installed About 278 GW of solar capacity last year, a figure that represents almost 60% of the new facilities worldwide.

And it was the result of an overcapacity that contributed to a fall of 60% of the prices of the solar modules between 2020 and 2024. At the December meeting, one of the measures agreed by the main manufacturers was to respect a minimum recommended price to preserve the margins, and had a moderately positive result in early 2025, with a price rebound.

But they don’t loosen the accelerator. The Cpia estimated Between 215 and 255 GW for this year, a cut in front of the amount of last year, but the accounts do not leave and the rhythm of facilities that are being kept is still very high: until April 30, 105 GW had been added, 75% more than what was installed in the same period of the previous year.

It is estimated that it was because in January a large number of facilities were carried out and that they will fall 44% in the second half of 2025. One of the measures driven By the Government to reorganize the industry, it entered into force on June 1: sell production at market price instead of a guaranteed rate in the new solar plants.

The antidote. “Instead of waiting for a cyclical recovery, we must face a disruptive restructuring in the sector,” said Zhu. And what are the proposals? Several are handled, such as focusing on improving collaboration between the government and companies to confront the offer through regulations or mergers.

Another is that I know Bet on technological innovation for both panels and production chain, which will allow sustainable growth and higher benefit margins. That is, not to make the crazy panels that anchored to a technology that can be quickly outdated, but is cheap, but to improve quality and make fewer panels, maintaining a higher price and avoiding saturation.

Change of mentality. Another problem is that there are too many things to consider. Those 33 Chinese companies of the CPPO are not the only ones that manufacture panels and there are those who may not respect self -control agreements. But, in addition, these internal problems are added tariff manids imposed by the United States.

In the case of panels, Trump’s administration He imposed tariffs of More than 3,500% to the importation of panels from China and 60% to materials such as polisilicio, wafers and Chinese solar cells. China’s response, according to the president of one of the local businesses, should be internationalization. “Due to tariffs, it is no longer enough to export: we must locate production abroad,” said Gao Jifan, president of Trina Solar.

We will see what happens, but try to stop that saturation of the market is significant, and that they talk about democrating production can generate a new battle from Western countries that we have already seen with the Chinese car: the one that try to attract the attention of manufacturers.

Image | Huasun

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