On October 14, the China Photovoltaic Industry Association held a "closed-door meeting" in Shanghai. They announced that entrepreneurs and representatives discussed strengthening industry self-discipline to prevent "involutionary" vicious competition, enhancing market mechanisms for survival of the fittest, and facilitating the exit of outdated low-efficiency capacities for sustainable development
On October 14, the China Photovoltaic Industry Association held a "closed-door meeting" in Shanghai. They announced that entrepreneurs and representatives discussed strengthening industry self-discipline to prevent "involutionary" vicious competition, enhancing market mechanisms for survival of the fittest, and facilitating the exit of outdated low-efficiency capacities for sustainable development. However, more specific details were not disclosed, raising widespread concern within the industry.
Why hold a meeting?
The photovoltaic industry has shifted from "a bright future" to "chaos," with the current reality summed up in one word: losses. The financial statements reveal the results of last year’s efforts. As Li Junfeng, executive director of the China Energy Research Society, states, we are “walking tomorrow's path while leaving no way forward.” Technological innovations emerge every few years, but high investments have not yielded expected returns. Inadequate intellectual property protection allows many cross-industry companies to enter with a quick-profit mindset, leading to talent poaching and resulting in product homogenization and price wars below cost.
Analysis agencies indicate that China's photovoltaic manufacturing capacity exceeds 1000GW, while global new installations are projected between 520GW and 600GW for 2024. Nearly a year of market reshuffling has yet to meet expectations. Although national departments have intensified support since mid-year with various policies, translating these into concrete actions at local government levels will take time.
What meeting was held?
The meeting included representatives from key companies in the industry chain, such as Longi Green Energy, Tongwei Co., Jinko Solar, JA Solar, TCL Zhonghuan, Trina Solar, GCL-Poly Energy, Chint New Energy, Canadian Solar, Aiko Solar, Daqo New Energy, Jetta New Energy, Sunshine Power, Highview Solar Technology, Red Lion Holdings, Meike Solar and Xinte Energy. Most attendees were company leaders with significant representation.
In the morning session, discussions focused on an industry self-discipline agreement to combat vicious competition and below-cost dumping while addressing supply-demand imbalances and excess capacity. The afternoon session concentrated on implementation details and action plans. Notably, this time’s discussions were more specific than those of the previous closed-door meeting in July.
Is the consensus genuinely reached?
NLS believes that certain conditions must be met for a true consensus. Recently, seven leading figures in the photovoltaic industry collaboratively wrote the character "He" (合) during a dialogue, symbolizing a shared sentiment within the sector. While this character is difficult to write, it reflects an essential emotional value. As JinkoSolar Chairman Li Xian-de noted, stakeholders are willing to engage in discussions aimed at fostering healthy industry development—indicating a positive direction.
From a micro perspective, reaching consensus addresses urgent needs within the industry. The current situation cannot simply be labeled as “grim,” and significant improvement seems unlikely soon. In September alone, eight photovoltaic companies—including Silver Star Energy and Huide Solar Energy—declared bankruptcy. The phrase “the more you sell, the more you lose” has become common; operating under negative cash flow while selling is now an unfortunate norm. Additionally, relentless price wars continue to escalate unabated.
On October 12th, China Resources Power opened bids for its 150MW agricultural-photovoltaic complementary project in Yiyuan West Li. The procurement involved N-type bifacial double-glass monocrystalline silicon photovoltaic modules with a total capacity of 180MWp. Among the 14 bidding enterprises, prices ranged from ¥0.5308 to ¥0.7255 per watt (元/W), averaging around ¥0.64元/W. While these are bid prices rather than final amounts, some companies quoting below ¥0.6元/W raise serious concerns.
From a macro perspective, achieving consensus aligns with national strategic requirements as well. Since July 30th, when top leadership called for preventing "involutionary" competition—and following months of policy introductions—the recent CCTV Dialogue program titled "Where Is China's Photovoltaic Confidence?" signals an inevitable trend toward unity among key industry players.
What consensus could be reached?
The 21st Century Business Herald reports that the meeting proposed collaboration between upstream and downstream companies to optimize the bidding process for photovoltaic power station construction. This includes a two-step bid opening, using reasonable average prices as targets, and incorporating factors like product innovation, quality reliability, intellectual property rights, sustainable operations, performance ability, social responsibility, ESG criteria, self-control measures, and green supply chains into the scoring system. The China Photovoltaic Industry Association will compile price and cost indices to better reflect current photovoltaic product prices for pricing adjustments.
In addition to this framework, several focal points may arise:
1. Capacity control and optimization: Manage excess capacity by optimizing industry structure and phasing out outdated capacities while addressing supply-demand imbalances.
2. Price coordination mechanism: Establish an internal price coordination mechanism to prevent destructive price wars and protect overall industry interests.
3. Market order maintenance: Strengthen industry norms through self-regulation to combat unfair competition practices.
4. Technological innovation and differentiation: Encourage technological advancements for differentiated product competition.
5. Policy support and collaboration: Actively engage with government bodies for policy backing while cooperating with governmental planning adjustments in the sector.
Conclusion
The photovoltaic industry is currently in its fourth quarter. Although a turning point has not yet emerged, the dry season is expected to raise electricity costs, increasing production expenses for industrial silicon and polysilicon. This may lead to slight price increases as supply-demand dynamics improve. Analysts indicate that rising silicon prices could activate subsequent stages due to price transmission. However, companies must develop reasonable production reduction plans aligned with industry conditions to revitalize pricing stagnation in the supply chain.