Chinese solar module manufacturers are indeed facing serious financial difficulties in the first quarter of 2025. The main reasons for the losses, as follows from company reports and analytics from Bloomberg and Reuters, are the following:

Low prices and overcapacity

• Prices for solar panels and components remain extremely low due to excess production capacity in China.
• Despite a slight increase in prices in February, the margin level remains insufficient to cover costs.
• CPIA (China Photovoltaic Industry Association) tried to introduce a minimum cost (0.69 yuan / W), but this did not stop the price war.

Decreased demand and logistical difficulties

• Domestic demand in China has slowed down due to changes in regulatory policy (transition to market pricing from June 1, 2024). – External demand faces trade barriers:
• The US has tightened tariffs on Chinese solar panels, including those made in Southeast Asia (to avoid anti-Chinese duties).
• Europe is also considering measures against dumping of Chinese solar products.

Worsening financial indicators

• Longi and JinkoSolar each lost 1.4 billion yuan ($193 million).
• JA Solar – 1.6 billion yuan, Trina Solar – 1.3 billion yuan.

For comparison: in 2023, the combined losses of the five largest players were less than 2 billion yuan, and two companies were still profitable.

Prospects for 2025

• Pressure on prices will remain, as overproduction in China continues.
• Trade restrictions (especially from the US) can increase market nervousness.
• Domestic demand in China may not compensate for the decline in exports due to regulatory changes.

Conclusion

Chinese solar companies are in a difficult situation: overproduction, a price war and foreign trade barriers are eating into profits. If the trend continues, the industry may consolidate and less efficient production facilities may close. However, in the long term, China will most likely retain its leadership in the sector due to its scale and government support.