Solar power facility in Zhangzhou, Fujian, southeastern China [Xinhua/Yonhap News]

The solar power industry, one of the strategic sectors fostered by the Chinese authorities, has recorded losses in the trillions of won during the first half of this year.

According to the Chinese economic media outlet Yicai on the 26th, 21 listed Chinese solar energy companies that recently released earnings forecasts reported a combined deficit ranging from 13 billion to 16.8 billion yuan (approximately 2.8 trillion to 3.6 trillion won), with losses occurring across almost every segment of the supply chain.

In particular, the combined first-half losses of the solar industry's "three giants"—LONGi Green Energy, Tongwei, and TCL Zhonghuan—exceeded 10 billion yuan (approximately 2.16 trillion won).

The report explained that the domestic solar installation volume in China experienced a correction this year due to the base effect from a sharp surge in installations during the first half of last year, as well as a lack of new energy consumption, which led to a decline in revenue for the module industry.

LONGi Green Energy, which saw its losses widen compared to last year, explained that it is struggling due to low operating rates, declining margins, and foreign exchange losses. Tongwei, a leader in the silicon and battery sectors, stated that product prices remain low because the fundamental supply-demand imbalance has not been resolved.

As the majority of companies face profitability pressures, moves to find a "breakthrough" are also emerging.

Hoshine Silicon succeeded in turning a profit in the first half by scaling back investments in the solar sector and focusing on the silicon industry. Other companies, such as solar film leader First PV, have moved away from crystalline silicon manufacturing—which suffers from overproduction—and expanded into other areas with global demand, such as energy storage, to improve their performance, the report noted.

Amidst the widespread deterioration in profitability, voices of concern continue to rise.

At the recent "Symposium on the Development Review of the Solar Industry for the First Half of 2026 and Outlook for the Second Half," Wang Bohua, former secretary-general of the China Photovoltaic Industry Association, stated that the domestic industry is facing a triple threat of supply-demand imbalance, shrinking demand, and strengthening trade barriers, adding that "the severe adjustment cycle continues to lengthen."

Liu Yiyang, executive secretary-general of the China Photovoltaic Industry Association, also assessed that "the current 'involutionary' (self-destructive) competition in the industry has not fundamentally changed," but expressed the view that recently announced 'mandatory national standards' would help resolve excessive cutthroat competition.

The Chinese government plans to implement mandatory national standards for solar energy starting next January. It has decided to set clear entry barriers for industries such as silicon raw materials and modules, and to phase out the bottom 20-30% of companies that fail to meet technical standards. The value-added tax refund policy for solar exporters was abolished in April of this year.

Solar power, along with electric vehicles and batteries, is one of the "New Three" (Xin San Yang) industries that Chinese authorities have strategically supported and nurtured.

While all three sectors achieved quantitative growth in a short period, they have also faced side effects such as profitability erosion and trade friction due to a proliferation of companies, overproduction, and cutthroat low-price competition.

Meanwhile, some companies in the electric vehicle sector have declared an end to "vicious competition."

According to reports, Yin Tongyue, chairman of China's Chery Automobile, stated at an event celebrating the company's 20 million global cumulative sales milestone that "After reaching 20 million units, we have decided not to participate in involution anymore. We will no longer pursue just sales volume, but will instead focus on brand enhancement, creating greater value, achieving more technological breakthroughs, and improving customer satisfaction."

Yicai pointed out that the background to Chairman Yin's remarks lies in declining domestic sales. It is a strategy of acknowledging that there is no chance of winning in a low-price war with other Chinese competitors, and instead choosing to transform into a premium brand.

In the first half of this year, Chery Automobile's total sales reached 1.275 million units, an increase of 1.2% year-on-year. While exports grew by 71.5% to 944,000 units, domestic sales fell by 150,000 units.