China is breaking records for the construction of solar power plants and has long been the undisputed world leader. However, this does not save the country from overproduction of solar panels and fierce competition. According to Reuters, the largest manufacturers were forced to cut almost a third of their employees.
"The largest Chinese companies working in the field of solar energy cut almost a third of their employees last year. One of the industries chosen by Beijing as a driver of economic growth is struggling with falling prices and significant losses," the agency writes with reference to company reports.
The job cuts clearly demonstrate the consequences of fierce price wars waged in Chinese industry, including the production of solar energy and electric vehicles, in conditions of oversupply of capacity and weak demand.
"The world annually produces twice as many solar panels as it uses, and most of them are manufactured in China," writes Reuters. The agency cites data from the Association of the Photovoltaic Industry of China that since 2024, more than 40 companies operating in the field of solar energy have left the exchanges, gone bankrupt or sold them.
"Chinese solar energy manufacturers built new plants from 2020 to 2023 in an emergency mode, as the state redirected resources from the real estate market to the so-called "new three" growth industries: solar panels, electric vehicles and batteries. This boom in construction has led to falling prices and a brutal price war, exacerbated by the introduction of US duties on the export of products from numerous Chinese factories in Southeast Asia. The industry lost $60 billion last year," Reuters noted.
According to him, the authorities are increasingly interfering in the work of the industry and Chinese President Xi Jinping called for an end to "disorderly price competition."
"And three days later, at a meeting with the heads of solar energy enterprises, the Ministry of Industry promised to stop price wars and decommission obsolete production facilities," Reuters continues.
The agency cites data that manufacturers have been urged to stop capacity expansion and close lines that are loaded at less than 30% of capacity.
"There is a lot of overcapacity in China, for example in the steel or cement industry, but you will not see any industry that has suffered losses across the industry for a year and a half," said Jefferies analyst Alan Lau.
As EADaily reported, while the European Union continues to discuss the energy transition to renewable energy sources, the capacity of solar power plants in China has exceeded 1 TW. This is three times the European capacity.