On one side, China’s stock market swings wildly, and on the other, the solar PV industry faces turbulent conditions. These two sectors are increasingly linked through capital flows, shaping their respective trajectories.
In the stock market, the Shanghai Composite Index surged from 2,700 to 3,600 points in just four days, only to drop below 3,200 points in three days. Investors are anxiously waiting to see when this downward adjustment will hit bottom.
Meanwhile, in the solar industry, polysilicon prices plummeted from 330,000 CNY/ton to 50,000 CNY/ton within a year. Solar module prices have also remained depressed for over a year, dragging the entire supply chain into severe losses. The uncertainty of when the industry will bottom out weighs heavily on both executives and investors.
Supply-demand imbalances have created significant stress for PV leaders, and addressing these challenges is now a key topic of discussion. On September 18, China’s state television invited top industry leaders—including GCL, Tongwei Solar, TCL Zhonghuan, Jinko Solar, Trina Solar, Longi Solar, and Astronergy—for a special discussion on the program Dialogue. The episode, titled Where Can We Find Confidence in PV in 2024?, aimed to restore market confidence through collaboration among industry giants.
At Tongwei Group’s 2024 shareholder meeting, Chairman Liu Hanyuan provided a clear but cautious forecast, stating that the earliest market recovery could occur in Q4 2024, while the most pessimistic scenario points to Q4 2025.
However, signs of a Q4 2024 recovery remain weak. On September 18, China Huadian’s latest solar component tender saw bids as low as 0.6221 CNY/W, setting a new record low. The persistent drop in prices indicates continued pressure on manufacturers.
Recent data shows that despite low prices, demand remains robust. From January to August 2024, China added nearly 140GW of new solar capacity, a 23.7% year-over-year increase. Industry forecasts predict that 2024’s total installations could reach 180-200GW, with the possibility of surpassing 200GW in Q4, traditionally a peak period for grid connections.
Despite growing installations, oversupply remains a pressing issue. China’s production capacity across wafers, cells, and modules has reached around 1,000GW, far exceeding global demand forecasts. Analysts predict global solar installations to range from 520GW to 592GW in 2024, with China alone expected to account for 240GW.
The oversupply has triggered a price war, leading companies to scale back production and delay projects. While some manufacturers and local governments are intervening to stabilize the market, capacity reductions are proving gradual and insufficient.
Industry insiders expect the sector to undergo repeated cycles of adjustment before achieving balance. The goal is to eliminate excess capacity, ending the current price war and restoring normal market conditions.
However, opinions differ on when the industry will recover. Some speculate that the sector could return to profitability as early as Q4 2024, though skepticism remains. Others fear it could take until 2026 for a full recovery. One industry analysis even suggests the next peak may not arrive until 2028.
