China moves to stabilize solar market and curb price war

In an attempt to reorganize the solar sector and avoid a structural crisis, the Chinese government announced a series of measures to curb excess production capacity and stabilize prices throughout the supply chain. The initiative was discussed at a meeting hosted by the MIIT (Ministry of Industry and Information Technology), bringing together key figures in the country's photovoltaic industry.

The meeting, led by Li Lecheng, Minister of MIIT, was attended by 14 solar energy manufacturers, as well as the CPIA (China Photovoltaic Industry Association).

During the meeting, the Chinese government reinforced its intention to combat so-called "disorderly competition," characterized by price wars, which, according to authorities, compromise the financial health and sustainability of the sector.

In an official statement, the MIIT emphasized that the sector must firmly implement the central government's guidelines, crack down on aggressive pricing practices, and accelerate the retirement of obsolete production capacity.
The Chinese minister highlighted the importance of companies adopting a self-disciplined stance, advocating a change in the sector's growth model.

Instead of prioritizing volume and accelerated expansion, the focus must now be on technological innovation, increasing product quality, and building sustainable long-term competitiveness.

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He also criticized the current model, marked by a frantic race for production, a scenario that, in China, is often called “involution.”

industry responses

Some sectors have already begun to respond. In the glass segment, for example, ten manufacturers announced they will reduce production by 30% during the month of July as a way to rebalance supply.

No polysilicon sector, a fundamental input for the manufacture of solar cells, there are signs of consolidation: executives from GCL Technology and Daqo New Energy have already publicly expressed their willingness to promote mergers and acquisitions.

Despite these initial moves, the market remains under pressure. Data from the China Nonferrous Metals Industry Association shows that polysilicon prices have remained below production costs for over a year. 

At least four companies halted operations in the first half of 2025 alone. The government's signal of intervention, however, encouraged investors. After the MIIT meeting, shares of several solar companies soared on the stock exchanges of mainland China and Hong Kong. 

Although the government's move represents a shift in stance, analysts warn that the sector's restructuring will not be rapid. Excess capacity is still widespread throughout the value chain, from silicon production to module assembly. According to them, the consolidation process could take months or even years to produce practical results.

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