Cheap, abundant Chinese solar panels have become essential to decarbonizing the global energy system. Without them, the world’s clean energy transition would have arguably been slower and more expensive. But China’s solar manufacturing industry now faces a bizarre problem: oversupply. Chinese solar manufacturers have built far more production capacity than the market can absorb. In fact, China now has enough factories to meet roughly twice the global demand for solar products, according to an analysis by the research firm Rhodium Group. If all newly announced factories get built, the country’s manufacturing capacity could double, further widening the gap between supply and demand.
The market imbalance has put Chinese solar panel makers in a precarious position. Market analysts and company executives say the industry’s central problem — a massive oversupply of panels — has triggered vicious “price wars” between competing companies and sent prices plummeting. In the first quarter of 2026, the country’s solar manufacturers announced $1.5 billion in losses, an extension ... Read more
