China’s solar industry is losing money. The country is doubling down anyway.
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- China's solar manufacturers reported $1.5 billion in losses in Q1 2026, extending roughly three years of continuous unprofitability, with the country's factory capacity now able to meet roughly twice global demand according to Rhodium Group.
- JinkoSolar and Longi are grappling with slowing domestic installations, U.S. trade barriers, and weaker global demand as companies slash prices in vicious internal "price wars," Rhodium Group director Hannah Pitt told the outlet.
- Regional Chinese governments have resisted trimming local solar development, with some manufacturers building illegal factories or producing panels without permits, according to reporting by the South China Morning Post.
- China's latest five-year plan signals continued state support and "optimizing and upgrading" of the solar industry rather than clamping down on oversupply, despite officials calling for "concerted efforts" to rein in production as recently as April.
- The Trump administration and Congress have weakened U.S. solar policy by cutting Inflation Reduction Act tax credits and impeding solar development on federal land, yet American producers remain heavily reliant on Chinese components and cannot meet domestic demand.
- Solar panels provided more electricity in the United States than coal for the first time on record in May, per Ember analysis, as cheap Chinese panels continue to fuel global clean energy deployment.
Why it matters: Global decarbonization just got a longer lease on cheap panels: with China doubling down on capacity despite $1.5B in quarterly losses and three years of unprofitability, Rhodium Group data points to low solar prices persisting for the foreseeable future. Competing nations like India face an uphill battle — a German wholesaler says they "have no advantages" against Chinese products on price.
