Solar panel industry faces overproduction, price wars, and major losses

“There are too many players in the solar panel industry, making autonomous cooperation (to avoid extreme price competition) difficult. We need to restructure the industry by improving technology and quality, and reduce the number of companies appropriately,” Zhong Baoshen, chairman of China’s major solar panel manufacturer Longji Green Energy Technology Co., Ltd., said at a financial results briefing for the July-September 2024 period held on October 30. Mr. Kane’s remarks reflect his distress over the solar panel industry’s ongoing price wars (even at the risk of incurring losses) and overproduction. ■70% of market capitalization evaporated
Since the start of 2024, major companies in the solar panel industry have been mired in losses. Longji Green Energy recorded a net loss of approximately 1.26 billion yuan (approximately 27.1 billion yen) in the July-September period, bringing its cumulative net loss from January to September to approximately 6.5 billion yuan (approximately 139.8 billion yen). The closing price of Longji Green Energy’s shares on the Shanghai Stock Exchange on October 31 was 19.74 yuan (about 424 yen), and its market capitalization fell to about 150 billion yuan (about 3.2251 trillion yen). Three years ago, in 2021, the company’s market capitalization briefly exceeded 500 billion yuan (about 10.7502 trillion yen), but it appears that about 70% of that has evaporated. It’s not just Ryoki Green. The performance of listed companies involved in solar panels is dismal. Comparing cumulative net profits and losses from January to September, Tongwei, a major silicon raw material company, posted a loss of nearly 4 billion yuan (about 86 billion yen), and TCL Zhonghuan, a major silicon wafer company, also posted a loss of about 6 billion yuan (about 129 billion yen). Among the major solar module manufacturers, Trina Solar posted a cumulative net loss of about 850 million yuan (about 18.3 billion yen) from January to September, while JA Solar posted a loss of 480 million yuan (about 10.3 billion yen) over the same period. During the same period, JinkoSolar managed to make a profit, but its net profit was about 1.2 billion yuan (about 25.8 billion yen), a decrease of more than 80% compared to the same period last year. The main reason for the companies’ deteriorating performance is that the production capacity of solar panels far exceeds demand, causing market prices to fall unstoppable. According to TCL Central’s financial report for the July-September period, although market prices have been stabilizing since the end of August, selling prices are still below manufacturing costs throughout the entire solar panel supply chain (from raw materials to finished products). In a statement released on October 18, the China Photovoltaic Industry Association, an industry group, estimated the current manufacturing cost of solar panels to be 0.68 yuan (about 15 yen) per watt of rated output. They criticized the company for setting a minimum standard that can guarantee product performance and quality, and for bidding in a competitive bid at a price below cost, which they said was illegal. (Caixin reporter: Zhao Xin)
*The original article was published on October 31st.

https://news.yahoo.co.jp/articles/6a8f5c4a87a1c446af80f81c2d2f039174e5de18