China’s solar industry ended 2025 on a rough note, and new company disclosures are now putting numbers behind just how painful the year turned out to be. After years of rapid expansion and falling prices, the world’s largest solar manufacturing hub is confronting the downside of that growth, with losses piling up even as installations continue to rise.
Several of China’s biggest solar manufacturers, including Longi, Trina Solar, Tongwei, JA Solar, and TCL Zhonghuan, have warned that they expect to report combined net losses of up to 38.4 billion yuan ($5.5 billion) for 2025 when full financial results are released later this year.
Louis Eriakha
Even the low end of that range would exceed the sector’s already record losses from 2024, underlining how little relief the industry found over the past year. This is happening despite China pushing installed solar capacity to around 1.16 terawatts by late 2025, a more than 40% year-on-year increase.
According to multiple reports, supply continued to grow faster than demand. Manufacturers rushed to expand capacity to capture market share and support Beijing’s renewable energy goals, but the resulting oversupply kept panel prices depressed for most of the year. China now produces roughly 80% of the world’s solar panels, leaving even market leaders with limited pricing power as competition intensified both at home and abroad.
What made 2025 especially difficult, however, was a sharp jump in costs, most notably silver. Used in paste form to create electrical contacts in solar panels, silver prices more than tripled over the past year and recently climbed above $90 an ounce. According to Bloomberg, silver now accounts for nearly 30% of a panel’s total cost, up from just 3.4% in 2023, dramatically squeezing margins across the industry.
Manufacturers have responded by cautiously raising panel prices and experimenting with ways to reduce silver usage, including shifting toward base metals. But passing costs on to customers remains risky in a market still struggling with oversupply, while trade barriers and the end of China’s export tax rebates for photovoltaic products add further pressure.
All of this has placed fresh scrutiny on Beijing’s “anti-involution” campaign, which aims to curb destructive price wars and excess capacity. Companies are exploring consolidation and tighter production discipline, but regulators have warned against coordination that could tip into monopolistic behaviour.
As 2026 begins, it's clear that China’s solar industry isn’t slowing in scale, but the easy gains are over. The losses expected from 2025 now set the baseline, and the key question is whether manufacturers can stabilise this year, or whether the reset still has further to run.
Emmanuel Umahi
