China’s dream of leading the world in clean energy is being tested as its largest solar panel makers report mounting financial losses. Yet analysts say government reforms and company restructuring could turn the tide, offering hope for a battered industry.
For everyday people, this matters. China is the world’s biggest supplier of solar panels, powering homes and businesses far beyond its borders. When Chinese firms suffer, the cost of solar technology worldwide can shift, shaping how fast countries cut their dependence on fossil fuels.
In the first half of 2025, losses at several top solar manufacturers ballooned as falling prices crushed revenues. Tongwei Co Ltd (600438.SS) recorded the steepest setback, reporting a 5 billion yuan ($700 million) loss, compared with 3.1 billion yuan a year earlier. JA Solar (002459.SZ) saw losses nearly triple to 2.58 billion yuan, while Trina Solar (688599.SS) swung from a profit of 526 million yuan last year to a 2.9 billion yuan loss.
One rare glimmer came from Longi Green Energy, the world’s biggest solar panel maker. Its losses narrowed to 2.6 billion yuan ($364 million), almost half of last year’s 5.2 billion yuan. Analysts at Huatai Securities credited “strengthened internal management” and a rush of solar installations across China for softening the blow.
The pain has roots in a global price war. Companies have been forced to slash prices below cost to win market share, leading to what Chinese policymakers call “involution”, a destructive spiral of undercutting. In response, Beijing has stepped in. A growing circle of government ministries is working on measures to stop cutthroat competition and stabilise the market.
“Progress on domestic ‘anti-involution’ measures has been smooth, which may support an industry chain profitability recovery,” Huatai analysts wrote in a research note.
Despite widening losses, some analysts see reasons to stay optimistic. Trina Solar’s energy storage unit posted its first-ever quarterly profit, with the company pledging an 800 million yuan injection to fuel growth. Meanwhile, investment banks including Citi and Huatai have kept a “buy” rating on Tongwei, pointing to its strong upstream polysilicon business, which is expected to benefit most from industry restructuring.
For the solar industry, the current crisis could be a painful but necessary reset. “This is a storm the sector must pass through to come out stronger,” said one Beijing-based energy analyst. “If restructuring succeeds, China could still dominate the next decade of global clean energy.”
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