Solar Firms Pledge to End Price War But Analysts Remain Skeptical

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China’s solar industry, encouraged by government subsidies and policies limiting carbon emissions, embarked on rapid expansion to grab nearly 95% of global production capacity

Solar companies in China have agreed to reduce vicious competition and strengthen self-regulation after over-production and a fierce price war have hit their bottom line.

The China Photovoltaic Industry Association (CPIA) convened a meeting at which company representatives reached a consensus on preventing “involution-style” competition. Measures to improve market mechanisms to reward stronger performers and ease the closure of outdated production capacities were also agreed, the association said on its social media account Monday.

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Chinese solar companies agreed to reduce over-production and self-regulate after a price war and oversupply hurt profits, agreed at a CPIA meeting.
From early 2023, overcapacity decreased the prices of key solar components up to 48%, leading to significant losses, with five major firms losing over 10 billion yuan.
Despite agreed measures, industry insiders doubt significant impact due to reluctance to cut production first; mergers and acquisitions are seen as necessary but challenging.

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