The Chinese industry has been pulling the prices of solar panels for years. Now 30% of its workers are on the street

Chinese solar panel manufacturers achieved a crushing domain of the industry with a relentless recipe: mass production, constant improvements and increasingly low prices. Now that they have left out European and American competitors, The whole world depends on its technology.

However, this apparent success story hides an internal crisis with serious consequences: a INSUSTANIBLE PRICE WARmillionaire losses and the silent dismissal of tens of thousands of workers.

An unprecedented overproduction. Between 2020 and 2023, the Chinese government redirected huge resources of the real estate sector, then in decline, towards what it called the “three new growth industries”: solar panels, electric cars and batteries. This bet unleashed a fever of new factories and Colossal dimensions solar parks.

The result was an unprecedented overproduction. According to Reutersthe world now produces twice as much solar panels it needs, most manufactured in China. This market saturation caused a collapse of prices to the point that many companies They started selling below their costs To give out to the stock, a situation that has been aggravated by the war of tariffs with the United States. The Chinese solar industry lost the amazing figure of 60,000 million dollars last year.

The human invoice. The least known consequence of this crisis, despite the fact that companies They asked the government for a rescueIt has been a drastic reduction of personnel. The financial reports of the five largest photovoltaic companies in China (Longi Green Energy, Trina Solar, Jinko Solar, Ja Solar and Tongwei) reveal a 31% reduction of their templates, which means that they left 87,000 employees on the street.

This figure is a mixture of direct layoffs and non -renovations due to salary or hours cuts. Diseases are a politically very sensitive issue in China, where employment is seen as the key to social stability. Therefore, none of the big companies have officially announced these massive template reductions. With the exception of Longi, who recognized a 5% cut of the template.

Beijing tries to stop the bleeding. The main producers created an entity similar to OPEC to control prices and offer, But it didn’t go well. Before the disaster, the Chinese government took action on the matter. In early July, President Xi Jinping asked for the end of the price war. In addition, a fund of 7,000 million dollars was created to buy and close about a third of the lower quality solar panels in the industry.

Is it enough? According to a Jefferies analysis, it would be necessary to eliminate at least one 20-30% capacity manufacturing for companies to be profitable again. However, many Chinese provincial governments, evaluated for their ability to create employment and economic growth, are reluctant to apply drastic cuts that affect their local companies.

Image | Jinko Solar

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