The photovoltaic (PV) industry serves as the core pillar for China to achieve its “dual carbon” goals and establish a new energy system. It has now established a global leading position and developed end-to-end self-controllable capabilities. However, the industry has long faced issues such as insufficient coordination between the manufacturing and application ends, a mismatch between production capacity layout and grid carrying capacity, and frequent cycles of overcapacity and shortage, which have seriously hindered the high-quality development of the industry. Coupled with geopolitical turbulence and the rise of trade protectionism in recent years, the “involutionary” competition in the industry has intensified. The scale of PV manufacturing capacity exceeds demand by twice, and low-price and disorderly competition has led to significant losses exceeding 100 billion yuan for the entire industry for two consecutive years. In the capital market, the total market value of the entire industry has shrunk by nearly 4 trillion yuan compared to its historical peak. If this trend continues to spread, it may trigger a series of chain reactions, posing a threat to national financial security. This year, the National People’s Congress and the Chinese People’s Political Consultative Conference have put forward relevant suggestions to incorporate the PV manufacturing sector into energy industry management.
In January 2025, the National Development and Reform Commission issued the “Notice on Deepening the Market-oriented Reform of Renewable Energy Grid-connected Electricity Pricing to Promote High-quality Development of Renewable Energy” (FGNJ [2025] No. 136), aiming to promote the full integration of renewable energy grid-connected electricity into the electricity market, with prices formed through market transactions, which has positive significance in the long run. However, as a national document, the specific implementation details are left to each province (city, district) to formulate, leading to unclear policies in many places. Faced with policy uncertainty and the operational risks brought by drastic fluctuations in electricity prices after renewable energy enters the market, many enterprises have had to slow down or suspend the development and construction of new projects, resulting in a stagnation in domestic photovoltaic (PV) installed capacity growth in 2025, and a potential negative growth in 2026 for the first time in recent years.
Meanwhile, influenced by geopolitical factors and stimulated by the US’s efforts to attract the return of manufacturing industries, China’s overseas photovoltaic (PV) module production capacity has significantly increased to over 100GW. The rise of PV manufacturing industries in the US and India has squeezed our international market, and exports may stagnate in the long run. Affected by this, China’s PV module exports fell to 2.1% year-on-year growth in 2025, and are expected to show zero or slight growth in the coming years. With pressure on both domestic and international markets, it is akin to adding insult to injury for the entire industry. If demand continues to slow down this year, the entire industry will continue to suffer losses, and “involutionary” competition is likely to intensify further.
At the crucial time when the country is fully advancing the “dual carbon” goals, the photovoltaic (PV) industry should no longer be managed as a general manufacturing industry. Instead, it should better protect its established leading edge in global competition, pay more attention to its important role in China’s energy transformation, and its significant strategic significance to national energy and foreign exchange security. Against this backdrop, incorporating the PV manufacturing process into energy industry management can achieve synergy between manufacturing and application, equal emphasis on safety and transformation, and unified policy and supervision for the PV industry. For the country, it is an upgrade of China’s energy management system based on changes in energy structure and energy security considerations, and an important guarantee for supporting the implementation of the “dual carbon” goals and high-quality national development. To this end, the following suggestions are proposed:
Firstly, it is suggested to incorporate the photovoltaic manufacturing process into the overall planning and management of the energy sector. The National Development and Reform Commission and the Ministry of Industry and Information Technology should take the lead in coordinating the management of the photovoltaic manufacturing industry, with the National Energy Administration, the State Administration for Market Regulation, the Ministry of Ecology and Environment, and other ministries and commissions providing coordination and cooperation. The photovoltaic manufacturing capacity should be coordinated with energy development and power grid construction, and a collaborative linkage mechanism of “manufacturing-application-consumption” should be established.
Secondly, it is suggested to refer to the mature experience of traditional energy industry management and establish a market regulation mechanism for photovoltaic manufacturing based on the Energy Law of the People’s Republic of China. Link the operation of photovoltaic manufacturing capacity with the national photovoltaic installation planning and export demand, and build a dynamic balance mechanism of “setting production according to demand”. Improve the price regulation system at the photovoltaic manufacturing end, establish a price warning mechanism, take price intervention measures and emergency measures when necessary, and build a risk mechanism to prevent and respond to abnormal market price fluctuations.
Thirdly, it is suggested to establish a unified national monitoring platform and improve the emergency response and excess monitoring system. A photovoltaic manufacturing operation monitoring system should be established to monitor data such as production capacity, output, price, energy consumption, and quality, as well as the operational dynamics of circulation, distribution, and consumption. The raw material link at the most upstream of photovoltaic manufacturing, polysilicon, should be included in the national energy security reserve system. An emergency response mechanism for raw material supply and storage in extreme situations should be established to enhance the resilience of the industrial chain.
Post time: Mar-09-2026