Summary of Key Points in Plain Language
In the first half of 2026, the top 13 listed photovoltaic (PV) companies in China saw a combined revenue decline of nearly 20% year-on-year, resulting in a total loss of 18.473 billion yuan. Only 2 out of the 13 companies were still profitable, while the remaining 11 all suffered losses. In previous years, the PV industry was characterized by aggressive expansion and a race to increase scale in order to capture the market. However, the situation has completely reversed: previously, layoffs mainly targeted assembly line workers, but now they are also affecting research and development (R&D) positions and management levels.储能, which was once considered a supplementary business by companies, has become a core source of revenue for the leading firms. Many companies have even chosen to abandon unprofitable orders, shut down under-construction factories, and sell off all their PV assets to exit the industry. The industry’s focus has shifted from “who can grow the largest” to “who can survive the longest.”
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Detailed Analysis by Dimension
1. How severe is the industry’s downturn? The once-prosperous PV sector is now facing collective losses among the top players
PV was once a highly profitable sector, with companies producing silicon materials earning billions annually. The current situation is starkly opposite:
- The companies that suffered the most losses were those in the silicon material production business, which were previously the most profitable. The industry’s overall operating rate was only 33.8%, meaning that 7 out of 10 production lines were shut down. The revenue of the leading company, Dalian Energy, plummeted by nearly 60%, and the income from selling silicon materials was not even enough to cover the costs of raw materials.
- Among the five major PV module manufacturers, all but one were in the red, with only Trina Solar posting a slight profit thanks to new business initiatives. Even Trina Solar, once the industry leader, lost 5.1 billion yuan in the first half of the year.
- The few bright spots are companies that have begun to reduce their losses. Trina Solar, which lost 3 billion yuan last year, only lost 270 million yuan in the first half of this year and even started making a profit in the second quarter. The key reason for this turnaround is that they focus on high-margin, premium products rather than competing on low prices for ordinary PV panels, and they use their energy storage business to offset losses.
2. Layoffs have spread to R&D and management: Even executives’ salaries are being cut
This round of layoffs in the PV industry is more severe than in previous years, with a focus on reducing costs:
- Three leading companies—GCL-Poly, Longi, and TCL-Solar—paid out a total of 215 million yuan in severance fees to laid-off employees. The total salaries paid by the seven top companies to all employees decreased by more than 20% year-on-year, and some companies cut executives’ salaries by nearly 40%.
- The scope of layoffs has expanded significantly, affecting everyone from headquarters staff and frontline sales personnel to R&D positions. Some leading companies have already announced plans for another round of layoffs in November. The logic is simple: every unnecessary employee costs the company money, so reducing the workforce means saving money.
3. Energy storage has evolved from a supplementary business to a vital core competency: Revenue from energy storage is five times that from PV panels
Energy storage was once seen as a secondary growth area for PV companies, but it has now become a essential part of the top firms’ operations. No company in the first tier can afford to ignore it:
- A typical example is Sungrow Power, where energy storage revenue now accounts for more than half of their total income, generating higher profits than their traditional inverter business. The gross profit margin of their energy storage business is 28.6%, meaning they earn nearly 29 yuan from every 100 yuan in sales, which is five times the profit from ordinary PV panels. Trina Solar generates 30% of its revenue from energy storage, with 95% of its orders coming from overseas markets, where they don’t have to compete on low prices.
- Other companies are diversifying their strategies: some are moving into lithium battery production with the goal of becoming among the top three in the industry within two to three years; others are investing billions in semiconductor technology or transitioning to hydrogen energy equipment. No one is focusing on low-end PV manufacturing anymore; everyone is pursuing higher-profit opportunities.
4. Companies that are willing to retreat are doing the best: Those that avoid low-price orders and sell off factories are profiting
The previous consensus in the PV industry was to maintain high shipments and industry rankings at all costs, but this has changed:
- A prime example is the established leader, Canadian Solar, which has consistently ranked in the top five global PV module exporters for 12 years. This year, they abandoned all domestic orders with a gross profit margin of less than 5%, resulting in a profit of 300 million yuan in the first half of the year, standing out among the industry’s losers. They stopped all unfinished silicon wafer and battery expansion projects, sold off idle equipment, and focused their production capacity on high-profit overseas orders. In the words of their chairman, “Taking a big step back today is to make a big step forward tomorrow.”
- Some companies have gone even further by selling off all their PV manufacturing assets and focusing on operating distributed power stations, which increased their profits by ninefold. In the first half of this year, an average of 28 PV-related companies were deregistered nationwide. Many small and medium-sized silicon material manufacturers that had expanded aggressively in the past have dismantled their production lines and no longer plan to resume production.
5. It’s not that the PV industry is doomed; it’s just that the old methods of competing (scale expansion and price wars) no longer work
Many believe the PV industry is on the decline, but this adjustment actually represents a shift in the industry’s rules:
- The previous overcapacity was due to low-end, inefficient production. Now, the government has introduced three new national standards, and high-energy-consuming, low-efficiency facilities will be phased out. Eight leading silicon material companies have agreed not to sell products below cost, eliminating the space for vicious price wars.
- Resources and capital are moving from PV manufacturing to high-value sectors such as energy storage, energy services, and power electronics. While PV manufacturers are laying off employees, the energy storage sector is hiring extensively. This is a transfer of value within the industry chain, not a general contraction. The next growth cycle will be driven by companies with strong technologies, high energy efficiency, and the ability to secure high-profit orders. Small and medium-sized players that continue to rely on borrowing to maintain production capacity are unlikely to survive the downturn.