Yesterday the official figure for Longi was released, but it should be noted that a large part of the module manufacturers are in the same situation.
The Chinese solar sector is going through an adjustment phase marked by overcapacity, a drop in industrial utilization and a projected slowdown in China, in contrast to more moderate growth globally.
The result comes in a context where, despite certain signs of recovery in prices and foreign trade, the industry continues to operate under structural pressure.
During the quarter, solar module prices rose between 15% and 20%. However, this improvement was not enough to fully offset other adverse factors within the value chain.
Even in terms of cost structure, the recent recovery in module prices coexists with pressures on key inputs such as polysilicon, wafers, and logistics, limiting the restoration of profitability. At the same time, competitive dynamics are driving aggressive commercial strategies in foreign markets, focused on volume and long-term positioning.
At the same time, the supply chain shows greater vertical integration among producers, which helps to partially mitigate price volatility in intermediate segments. However, this strategy does not completely eliminate the supply and demand imbalances that persist globally, given that while global manufacturing capacity reached 1.33 TW , effective demand hovered around 650 GW , an imbalance that fueled the price war and is now forcing an industrial restructuring.
Exports on the rise and the fiscal effect
Meanwhile, Chinese exports of solar cells grew 38% year-on-year in the first quarter, peaking at 80% in March.
This behavior was partly due to circumstantial factors:
- Shipments accelerate as export tax incentives end in April
- Higher external demand in certain markets
These elements allowed for sustained volumes in a context of price pressure.
Excess capacity and regulatory signals
Despite these indicators, excess capacity remains one of the sector's main challenges.
Chinese authorities have held at least three meetings this year with solar manufacturers to promote controls on production expansion.
These meetings also included state-owned companies such as China Huaneng Group and China Datang Corporation, major buyers of photovoltaic technology.
"Chinese manufacturers could agree on production and prices, but in reality they want to compete to be first to market and are facing a very strong trade war," industry sources describe.
An industry in transition
Market data reflects a broader adjustment scenario:
Global module manufacturing capacity exceeded 1200 GW in 2025, while the average utilization rate fell below 50%.
China, the main driver of demand, is showing a slowdown in installations (from 329 GW in 2024 to an estimated ~285 GW in 2025). Meanwhile, globally, installations continue to grow, albeit at a more moderate pace.
In this context, the solar sector is moving towards a stage of rebalancing between supply and demand, with pressure on margins but with demand fundamentals that remain active internationally.