China's Big Four Solar Firms Post 1 Trillion Won Loss in Q3... Recovery Unlikely by End of 2027

Chinese solar manufacturers have partially improved their profitability by reducing production volumes and increasing the share of high-efficiency products, but they continue to post substantial losses due to oversupply and sluggish demand. New solar installations in China from January to September this year fell 54% year-on-year, while polysilicon inventories have swelled to more than six months’ worth of global wafer production. Industry analysts expect that a clear recovery in performance will be difficult before the end of 2027.

Bloomberg reported on Tuesday (local time) that four major Chinese solar companies recorded a combined net loss of 4.63 billion yuan (approximately 1.045 trillion won) in their third-quarter results.

Longi Green Energy, JinkoSolar, Trina Solar, and Tongwei, all representative companies of China’s solar industry, failed to turn a profit. Analysts note that the structural downturn in China’s solar sector has now entered its third year.

Some positive shifts emerged in the third-quarter results. With increased sales of high-efficiency solar panels and the implementation of production cuts and measures to curb price competition, some companies reported reduced losses compared to the previous quarter.

Longi recorded a net loss of approximately 1.03 billion yuan (roughly 230 billion won) in the third quarter. While the loss narrowed compared to the second quarter, the gross profit margin also improved. Notably, the expanded sales of next-generation back-contact (BC) solar modules contributed to this profitability improvement.

According to energy-focused media outlet Energy Trend, Longi’s BC module sales from January to September this year reached 31.64 GW, a 118.6% increase from the same period last year. This accounted for more than 65% of the company’s total module shipments of 48.61 GW. High-efficiency products are increasingly serving as a means to escape price competition and enhance profitability.

Tongwei’s third-quarter net loss also decreased by 38.7% from the previous quarter to approximately 1.639 billion yuan (roughly 370 billion won). However, the loss expanded significantly compared to the same period last year.

The Chinese government has strengthened oversight of excessive capacity expansion and low-price selling practices to curb cutthroat competition in the solar industry. However, production cuts and product upgrades alone are insufficient to resolve the industry-wide supply-demand imbalance.

The most pressing issue in China’s solar industry remains overcapacity.

According to BloombergNEF (BNEF), polysilicon inventories, primarily in China, hit a record high of 600,000 tons in August. This volume is sufficient to supply raw materials for global solar wafer production for more than six months.

Demand slowdown is also severe. According to China’s National Energy Administration (NEA), new solar power installations in China from January to September this year fell 54% from the same period last year. As new installation demand in the world’s largest solar market plummets, manufacturers are struggling to absorb their production capacity through export expansion alone.

Global market outlooks have also been revised downward. BNEF lowered its forecast for global new solar installations this year by 39 GW, from 624 GW to 585 GW, a reduction of approximately 6.3%.

Zia Chen, an analyst at Bloomberg Intelligence, analyzed Longi’s third-quarter deficit and projected that a significant amount of time will be required for the Chinese solar industry to recover. Structural overcapacity is limiting earnings recovery, given that panel prices remain low and domestic demand in China is declining.

He predicted that the Chinese solar industry is unlikely to achieve a meaningful recovery before the end of 2027.

Chinese economic media outlet Caixin reported on the 2nd that, after expanding the scope of its analysis to six companies, the combined net loss for the third quarter reached approximately 7 billion yuan (approximately 1.58 trillion won). This represents an increase in losses compared to approximately 5.9 billion yuan (approximately 1.33 trillion won) for the same period last year. Notably, the losses of Trina Solar and Tongwei expanded. This situation reflects a simultaneous occurrence of improved profitability compared to the previous quarter for some companies and a year-on-year deterioration in performance across the entire industry.