China Meets Solar Firms to Curb Price Wars, Overcapacity

• China regulator to meet solar industry on pricing compliance.

• Meeting aims to curb excessive competition in sector.

• Solar manufacturers continue facing losses from overcapacity.

• Authorities renew efforts to address prolonged price war.

China’s market regulator will meet solar industry representatives on Friday to issue guidance on pricing compliance and cost-accounting standards as Beijing intensifies efforts to curb destructive price competition that has pushed the country’s photovoltaic (PV) sector deeper into losses.

The meeting, first reported by local media, is part of a broader government campaign against what Chinese authorities call “involution-style” competition, as persistent overcapacity and aggressive discounting continue to erode profitability across the world’s largest solar manufacturing industry.

Solar industry losses top $3 billion

The financial strain across China’s solar sector has intensified. According to China Daily, 21 listed Chinese solar companies expect combined first-half losses of 13 billion to 16.8 billion yuan, equivalent to more than $3 billion.

Among the largest manufacturers, LONGi Green Energy forecast a 3.4 billion to 3.8 billion yuan net loss for the first six months of the year, while Tongwei Co. projected losses of up to 5.4 billion yuan, highlighting the severe pressure facing even the industry’s largest producers.

The prolonged price war has squeezed margins throughout the solar supply chain, from polysilicon producers to module manufacturers, with many companies continuing to sell products below sustainable production costs in an effort to preserve market share.

Domestic demand slows as overcapacity persists

China’s domestic solar market has also weakened. The country installed 72.07 gigawatts (GW) of new solar capacity during the first half of 2026, down 60% from 212 GW in the same period last year, according to industry data.

The slowdown has prompted expectations that China’s annual solar installations could decline for the first time since the country’s grid-parity era began, marking a significant shift for the world’s largest renewable energy market.

Although industry groups describe the moderation as a return to more sustainable growth after years of record expansion, manufacturers continue to face excess production capacity that has outpaced both domestic and overseas demand.

Beijing tightens oversight of pricing practices

Friday’s meeting follows earlier efforts by Chinese authorities to introduce standardized photovoltaic cost-accounting rules, providing regulators with a framework to identify and discourage below-cost pricing.

The campaign extends beyond the solar industry and forms part of Beijing’s broader effort to reduce excessive price competition across sectors including electric vehicles, batteries and heavy industry, where prolonged discounting has weakened corporate profitability.

The outcome of the meeting will be closely watched by global renewable energy markets. Any measures that successfully stabilize prices in China could lift global solar module prices after years of declines driven by Chinese oversupply, while failure to curb excess capacity would likely prolong pricing pressure across the international solar supply chain.