The current situation of China's photovoltaic module industry

In recent years, China's photovoltaic module production capacity and output have been continuously increasing, while global photovoltaic module production capacity continues to concentrate in China. With the expansion of photovoltaic module production capacity and lower than expected downstream demand, the mismatch between supply and demand in the market will become prominent from 2023, triggering fierce market competition and leading to price pressure and decline. In this context, many listed companies in China's photovoltaic module industry have experienced a decline in net profit attributable to their parent companies, and even incurred losses. In addition, in recent years, China's demand for photovoltaic module exports has been strong, with the export volume increasing from 66.6GW in 2019 to 238.8GW in 2024. However, due to factors such as the decline in photovoltaic module prices, its export value will gradually decrease from 2023.

1. The rapid development of downstream industries has brought strong growth momentum to the photovoltaic module industry

Photovoltaic modules, also known as solar panels, are the most important components in photovoltaic power generation systems. It is mainly composed of photovoltaic cells, interconnecting bars, busbars, photovoltaic glass, adhesive film, backplate, aluminum frame, junction box, etc. Its main function is to convert solar energy into electrical energy and output direct current. In recent years, with the promotion of the "dual carbon" strategy and the implementation of policies such as the "Notice on Promoting the Coordinated Development of the Photovoltaic Industry Chain and Supply Chain", China's photovoltaic industry has developed rapidly, with new and cumulative installed capacity continuously increasing, bringing strong growth momentum and broad market space to the development of the photovoltaic module industry. Data shows that in 2024, China's newly added and cumulative installed capacity of photovoltaics reached 277.17GW and 886.66GW respectively, with year-on-year growth of 27.8% and 45.47%, respectively.

2. The production capacity of photovoltaic modules continues to expand, and the global photovoltaic module production capacity continues to concentrate in China

In recent years, with the support of favorable policies at the national and local levels, as well as the high prosperity of the photovoltaic industry, the photovoltaic module industry has ushered in a wave of capacity expansion, with production capacity continuously expanding, rising from less than 200GW in 2019 to over 1000GW in 2024, with an average annual compound growth rate of over 45%. At the same time, against the backdrop of the shift of global photovoltaic industry focus to China, global photovoltaic module production capacity continues to concentrate in China. Data shows that the proportion of China's photovoltaic module production capacity in the global market has increased from 69.20% in 2019 to 83.41% in 2023.

3. The production of photovoltaic modules has increased, but prices have fallen

In terms of production, in recent years, with the rapid development of the photovoltaic industry and the driving force of export demand, China's photovoltaic module production has continued to rise, increasing from 98.6GW in 2019 to 588GW in 2024, with an average annual compound growth rate of 42.92%. It is worth mentioning that with the expansion of photovoltaic module production capacity and downstream demand falling short of expectations, the mismatch between supply and demand in the market will become prominent from 2023, triggering fierce market competition and leading to price pressure and decline. According to Infolink data, photovoltaic module prices will experience a cliff like decline in 2023, with a nearly half decrease at the end of the year compared to the beginning of the year; According to data from the Ministry of Industry and Information Technology, the price decreased by 29.7% year-on-year from January to December 2024.

4. Several listed companies have seen a decline in net profits attributable to their parent companies

Affected by factors such as overcapacity and price decline, many listed companies in China's photovoltaic module industry have experienced a decline in net profit attributable to shareholders, and even losses. Among them, in 2024, JinkoSolar's photovoltaic module shipments reached 92.9GW, a year-on-year increase of 18.3%, ranking first in China. But it has fallen into the dilemma of "increasing volume and decreasing profits", with both operating revenue and net profit attributable to shareholders decreasing by 21.96% and 98.78% year-on-year, respectively; Tianhe Solar's operating revenue decreased by 29.15% year-on-year, with a net loss attributable to the parent company of 3.455 billion yuan, a decrease of 190.35% year-on-year; Although listed companies such as JA Solar, Longi Green Energy, and Oriental Sunrise have not disclosed their annual reports, their performance forecasts show that their net profit attributable to the parent company has turned from profit to loss, and has significantly decreased compared to the previous year.

5. The export of photovoltaic modules shows a trend of "increasing quantity and decreasing value", with the Netherlands being the largest export market

In recent years, Chinese photovoltaic module enterprises have actively expanded their overseas markets. By the end of 2024, the number of overseas markets with export volumes exceeding 1GW has increased to 38, effectively promoting the growth of demand for photovoltaic module exports. Data shows that in recent years, China's demand for photovoltaic module exports has been strong, with export volume increasing from 66.6GW in 2019 to 238.8GW in 2024, with an average annual compound growth rate of 29.1%. However, due to factors such as the decline in photovoltaic module prices, its export value has gradually decreased since 2023, reaching approximately 27.99 billion US dollars in 2024, a year-on-year decrease of 29.34%. In addition, as the dominant position of the domestic demand market gradually strengthens, the proportion of China's photovoltaic module exports to production continues to decline, from 67.55% in 2019 to 40.61% in 2024, a five-year decline of 26.94 percentage points.

At present, China's photovoltaic module export market is showing a diversified trend, with the top ten markets accounting for 61.7% of the total export value by 2024. Among them, the Netherlands is the largest export market for photovoltaic modules in China, accounting for approximately 16.8% of the total export value in 2024; Next are Brazil and Pakistan, with 9.2% and 7.1% respectively; The US market did not enter the top ten, with exports accounting for less than 2.4% and exports accounting for only 0.11% of the total. Therefore, the direct impact of US tariff policies on China's photovoltaic module exports is relatively limited.

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