The global photovoltaic industry is going through one of its most challenging periods in recent years. After a prolonged period of manufacturing expansion, the oversupply of solar modules has led to a sustained drop in prices, putting pressure on the margins of manufacturers, distributors, and developers in virtually every market.
Alexander Foeth , commercial director of JA Solar Mexico , summarized this phenomenon with a concept widely known within the sector: the "solar coaster" , a cyclical dynamic where periods of strong growth are followed by stages of slowdown, overproduction and market corrections.
“There’s an explosion in demand, it lasts two or three years, then it drops again, and that varies from region to region. How do you adapt your production and your power plants to that? It’s complicated,” Foeth stated during his participation in the Future Energy Summit (FES) Mexico.
According to the executive, much of the current situation stems from the rapid expansion of China's installed production capacity in recent years. As supply began to exceed demand in various markets, commercial competition led to aggressive price reductions.
However, various indicators are beginning to show that the market may be approaching a turning point. After several years of continuous decline, international analysts predict a gradual recovery in photovoltaic module prices starting in 2026. One of the main factors behind this change is the elimination of tax incentives for solar exports from China, a measure that will directly impact manufacturing and marketing costs.
Industry projections anticipate increases of between 10% and 15% in module prices over the next few years , marking the possible end of a period characterized by historically low values.
For manufacturers, this correction represents not only a financial adjustment but also a necessary condition to guarantee the sustainability of the business.
“If I sell a panel today, in 30 years I have to still be around to be able to offer any guarantee, for any reason. We're talking about a product that lasts 30 years. Find a product that they sell you and give you a 30-year generation guarantee. Where do you find it?” Foeth warned.
Mexico is preparing for a new growth cycle
The discussion comes at a key moment for the Mexican market. The recent awarding of 7,400 MW of renewable energy projects under the new mixed schemes promoted by the Federal Electricity Commission marks one of the most important signals for the industry in recent years.
In parallel, energy storage is beginning to gain prominence within investment strategies, creating a different scenario from the one that prevailed for much of the last decade.
Continue reading
For Foeth, this new stage requires a deeper analysis of the technological selection of projects: “Quality has a price, it’s worth it and we can prove it.”
According to him, the evaluation should no longer be limited to the cost of acquiring the modules, but should incorporate indicators such as the levelized cost of energy (LCOE), the costs associated with the balance of system (BOS) and the expected performance throughout the plant's useful life.
From best-case scenario to worst-case scenario
One of the most striking aspects of the executive's participation during FES Mexico was his insistence on changing the way suppliers are evaluated.
Instead of focusing solely on ideal operating conditions, Foeth believes that developers should demand answers about the most complex scenarios.
“We would like you to challenge us. Ask the tough questions. Ask the worst-case scenario questions,” he said. The premise is simple: differences between manufacturers usually emerge when operational problems arise, not during the initial stages of projects.
To illustrate, the executive shared the case of a distributed generation facility in Monterrey where a connector failure caused significant damage to the system. He explained that the company mobilized technical resources to conduct on-site diagnostics and assist in resolving the problem, regardless of the responsibilities associated with the origin of the failure.
“We sent a thousand connectors without asking,” he recalled.
The same logic, he assures, applies to both small-scale projects and large solar power plants. “We handle projects from 100 kW to 100 MW. We give them the same diligence,” he emphasized.
The experience accumulated in distributed generation represents one of the main assets that the company seeks to bring to this new stage of the Mexican market.
During the last year, JA Solar participated in the installation of more than 400 MW distributed in thousands of projects around the country , a segment that, according to Foeth, has been key to strengthening the responsiveness of the technical and commercial teams.
“My team and I are forged in the fire of distributed generation,” he says.
As Mexico prepares to incorporate thousands of MW of solar power under new investment schemes and the global industry seeks to stabilize after years of oversupply, the sector seems to agree on one central idea: the next growth cycle will be defined by who can guarantee performance, support and permanence for the next three decades.