Energy Shift to Save China's Solar Power? Frontline Executives Speak Out: The Cleanup Is Still Before Dawn

Ask AI · How can solar photovoltaic companies use differentiated products to break the vicious cycle of price wars?

**Editor’s Note: **The fighting in the Middle East is striking the world’s most sensitive energy nerves. Behind large fluctuations in international oil prices, shifting expectations for inflation and interest rates are intensifying uncertainty in the global economy. The cracks in the “oil–dollar” system are accelerating the reshaping of global energy structures and financial rules. Tencent Finance’s special series “Energy Trigger Points” follows the unfolding direction of events in the Middle East, tracks the chain of impacts of key incidents, and decodes the underlying logic and future trajectory of energy games. This article is Episode 5 of the series.

By | Zhou Ailin

Edited by | Liu Peng

International oil prices have surged past the $100 mark, and the complete reopening of the Strait of Hormuz is still far off. The destruction of energy infrastructure means high oil prices are likely to last even longer.

Global energy security anxiety is once again rising, and the replacement value of new energy sources such as solar photovoltaic is being reassessed. This inevitably brings to mind the Russia–Ukraine war in 2022, when Europe—highly dependent on Russian crude oil, with reliance at nearly 40%—faced a crude oil shortage crisis.

In essence, the Russia–Ukraine war acted as an “accelerator” for China’s solar PV industry—it concentrated demand that Europe would otherwise have taken 10 years to fulfill. In 2022, China’s PV exports to Europe grew by more than 100% year over year. That same year, Europe imported about 80–100GW of PV modules from China, while Europe’s actual新增装机 (newly added installations) in that year was only about 40GW, leaving a large volume of modules in inventory.

Now, a similar script appears to be playing out again, but the market is far less frenzied than in those days, and the PV sector’s行情 in 2026 is nowhere near as dramatic as it was then. Against the backdrop of insufficient downstream demand, the “anti–price-war” stick has not cleared the solar PV industry of overcapacity and chaos.

Against this backdrop, we spoke with Chen Tian, head of the Energy Management Center at Blue Sail Technology Group, and general manager of Blue Sail New Energy. In the view of this first-line executive who has gone through multiple PV cycles, one side is potential demand spawned by overseas energy crises; the other is the domestic PV industry mired in the swamp of excess capacity and homogeneous competition. Overseas markets are not simply a matter of “windfall riches.” In the dawn before sunrise, domestic overcapacity still needs to clear—only by giving up low-price price wars and focusing on high–added-value products can companies capture the real upside from this round of energy reshuffling.

Europe is different from the “Russia–Ukraine period,” and still needs differentiated breakthroughs

Compared with the Russia–Ukraine period, Europe’s short-term direct shocks today are still somewhat weaker. More importantly, the problem is that Europe no longer lacks solar PV modules.

Chen Tian believes the current issue lies in three points: first, Chinese companies have already been抢出口 (rushing exports) at the start of the year; second, Europe’s PV installation season is highly seasonal (not suitable in winter and summer); third, module profits have been diluted, so more differentiated planning is needed.

Specifically, affected by the reduction in China’s export tax rebates on April 1, Chinese companies集中抢出口 before the rebate cut, which has left Europe with extremely abundant module inventories and, in the short term, a severe oversupply.

Although energy prices have been soaring now, Europe’s installation window is highly seasonal—winter and summer are not suitable for installation. Only spring and autumn are peak seasons. At this time, it is not a demand high point, so modules are not urgent.

“The result is that Chinese companies continue to wage price wars in Europe, and the domestic price-war pressure directly overflows abroad,” Chen Tian said. “Module quotes are currently inflated, but actual transaction prices drop significantly. Industry profitability is thin—net profit margins are only 2%–3%. European channel partners and installers are forced to dump inventory at low prices to回笼资金. Right now, ports such as Rotterdam are packed with goods, and in the short term there’s no ‘explosive upside opportunity.’”

Compared with modules, inverter profitability has long had a better landscape. But the problem is that this segment’s structure is stable, with top firms effectively holding monopoly positions (Huawei and Sungrow as a duopoly, plus European local brands such as SMA and Fronius). Small and medium-sized enterprises find it hard to enter; certification, branding, and channel competition are what really matters.

How can Chinese companies break through? Where are Europe’s opportunities? Chen Tian said, “Europe doesn’t lack modules. Taking Blue Sail Technology as an example, in 2023, the company had to咬牙果断ly sell off a 40 million yuan conventional module production line, giving up homogeneous competition. Instead, relying on advantages in glass technology, we developed lightweight PV modules—moving to 1.1mm ultrathin PV glass. Module weight was reduced to 5.4kg/㎡, a reduction of over 55%.”

The reason is that Europe has a pain point: one third of roofs cannot meet structural load requirements (7.5–10kg/㎡). Conventional modules (12.5kg/㎡) cannot be installed at all. Flexible modules experience severe degradation over two years, whereas lightweight modules reduce weight by over 55%, enabling them to fit roofs where Europe’s load capacity falls short by about one third. Also, product premiums can reach 30%. According to Tencent News’s “Qianwang” (Panwang), these ultrathin PV glass products have already entered Europe’s testing and small-batch promotion stage, and still await feedback from the European market.

In addition, people in the industry also note that although Europe is not short on modules, it is extremely short on energy storage. For residential energy storage (户储), orders are booked until July and August. During the Russia–Ukraine conflict, prices rose by more than 50%, but inventory still sold out. The unit price of energy storage is high and decision-making is cautious; however, once it becomes a necessity, profits are far better than modules.

Southeast Asia: hard to pick the “peach,” and needs to adapt to the local ecosystem

Southeast Asia’s anxiety about high oil prices is also clearly detectable. According to Tencent News’s “Qianwang,” even places like Thailand have reportedly seen queues for gas.

Many countries in Southeast Asia face pain points such as insufficient electricity supply, frequent power outages, and a high dependence on oil and gas. The economics and necessity of PV + energy storage are significantly improved. But for Chinese companies, picking such “windfall riches” is not easy.

In Chen Tian’s view, the Southeast Asian market’s breakthrough is full of challenges and requires avoiding traps. The main issue is that the overall market size in Southeast Asia is far smaller than Europe and China—so it can only serve as a supplemental growth increment to the global market, unable to absorb China’s massive capacity of over 1,500GW. Even if demand grows quickly, the scale of installations in the short term remains limited.

More crucially, the challenge lies in the local ecosystem—family-based business models and barriers between political and commercial interests. Compliance and receivables risk are extremely high. Without strong local partners, companies that enter directly will face difficulties in project advancement and challenges in receiving payments.

Another challenge not to be ignored is that Southeast Asia’s power grids have weak capacity. Local grid construction is lagging; the grid framework is thin and dispatching capability is insufficient. This is far less than China’s grid, which has strong absorption capacity. As a result, large-scale installations cannot be effectively transmitted and utilized.

A point rarely mentioned is that most countries are unwilling to accept Chinese companies participating in grid construction. The grid-connection bottlenecks are hard to solve in the short term, directly constraining the expansion of PV installation scale. Southeast Asian PV projects also commonly face complicated approval procedures and scarce generation quotas.

Industry insiders say that taking Vietnam as an example, obtaining indicators for wind and PV projects is extremely difficult, with long approval cycles and high uncertainty. In some countries, policies change frequently; adjustments to subsidies and grid-connection rules may directly affect project returns, and investment payback cannot be guaranteed.

Chen Tian believes that Indonesia—where the market is large and the population base is high—is the “top contender” in Southeast Asia. Its electricity shortage is prominent and the government’s push is strong.

“But it’s also not suitable for companies to enter and deploy directly. Barriers in political and business relations are high. Our strategy is still not to participate directly in local operations. Instead, we rely on local partners with resources and qualifications as a buffer—so Chinese companies export core products, technologies, and materials, and avoid as much as possible low-price competition and compliance traps.”

In fact, besides Southeast Asia, Chinese companies also have natural advantages in Africa. Africa lacks a mature local PV supply chain and is highly dependent on products and solutions from China. Chinese companies’ supply chains, delivery capabilities, and cost-effectiveness are all superior. For example, in Zimbabwe, local authorities are pushing rural million-household PV + storage system projects. Now, customers urgently require faster shipments. The core pain points are that oil prices are rising, electricity supply is insufficient, and power outages are frequent—PV + storage has become the key solution to ensure production and daily life.

Anti–involution is still in the dawn before sunrise, and 2026 is the year of full capacity clearing

For China’s solar PV industry, it is still going through a difficult phase of capacity clearing.

In July 2025, the term anti-involution (anti–price-war) became popular in international markets. Overseas investors paid close attention, and A-shares briefly broke above 3,600 points. There were signs of a resurgence in the “re-inflation trade.” At a national-level high-level meeting, it was proposed to regulate disordered price cuts and excessive competition among producers. One month after the July meeting, the average share prices of the PV companies covered by institutions (Tongwei / GCL / LONGi) rose by 32%. Within two weeks, polysilicon prices (non-transaction prices) increased by 40%.

However, afterward the market gradually returned to calm. With weakness in downstream demand, reform results on the supply side have been limited, and PV giants still refuse to give up trying to capture market share. Now, even if the Middle East war is igniting expectations for new energy demand, in Chen Tian’s view the PV industry is still in a relatively painful capacity-clearing period.

“Anti–involution measures have limited effect. Even if a tender floor price is set, the terminal market still doesn’t accept it. The actual transaction prices are about 10% lower than the quoted prices. Overall industry profitability remains thin, and several leading companies are seeing losses. More seriously, the capacity clearing process is slow; large amounts of government assets are involved. Even if some companies incur losses, it’s difficult for them to exit completely, resulting in poor competition driving out good—industry spot-check pass rates drop significantly, and low-priced, low-quality products are hitting the market.”

He added, “In 2026, it will be a complete year of capacity clearing for China’s solar PV industry. This is a marathon-style elimination race of endurance; bankruptcies and capacity consolidation will continue to happen.”

A recent low-price acquisition deal is a snapshot of this. One new energy company’s valuation reached 8 billion yuan at its 2023 July Pre-IPO round of financing. This year it was acquired by TCL Zhonghuan, and the pre-deal valuation fell to 800 million yuan. That is down about 90% from its peak. This “knee-cutting” style change in valuation not only reflects a retreat of confidence from the capital market in the PV sector; it also highlights the industry’s deep transition from狂热扩张 (frenzied expansion) to a harsh capacity-clearing phase.

From the perspective of the industrial chain, capacity across all links—silicon materials, wafers, cells, and modules—is highly overbuilt. Industry capacity exceeds 1,500GW, while global actual demand is only around 600GW. Combined with the April 1 reduction in export tax rebates on modules, the earlier抢出口 phenomenon further intensifies phase-specific supply pressure.

In the view of Chen Tian, a PV veteran who has witnessed multiple cycles, the company’s current strategy is still to abandon en-involution module production and focus on differentiated product R&D—such as lightweight modules: reduce the thickness of glass, improve product pricing. Meanwhile, for the industry, energy storage remains the key to winning in the future. Sungrow was in the early years able to reach the top in market value primarily because it laid out energy storage early. And even Longi, which later realized it was behind, has just started to ramp up its energy storage布局. Companies like JinkoSolar and Eastern Rise are also increasing their investment. The integration of PV and storage requires a good EMS management system, which is the key area for competition in future new energy.

After surviving the capacity-clearing pains in 2026 and escaping ineffective price wars, China’s solar PV industry can truly move from a “capacity superpower” to a “manufacturing and industrial strength” power, achieving high-quality development on the global new energy track.

“Energy Trigger Points” series

Episode 04｜The chokehold on the world’s energy arteries—China’s new energy brings massive windfall opportunities in Southeast Asia

Episode 03｜The road to peace is getting narrower, while the road to oil prices breaking $200 is getting wider

Episode 02｜The oil “being held hostage”: Is Iran reshaping global oil pricing power?

Episode 01｜Xu Qinhua: The essence of the U.S.–Iran conflict is the “oil-dollars” protection war waged by the United States