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China is producing more than 80% of global solar cells but dozens of businesses are still going bankrupt. Is this a sign that the world's largest green energy industry is entering the most serious crisis in history?
China's solar energy industry is facing an unprecedented paradox. While the world still considers this the "green energy factory" of the planet, many businesses are sinking in losses, laying off employees and facing the risk of disappearing.
It is worth noting that this crisis appears at a time when the need for global energy transition is still huge and fossil fuel prices are constantly fluctuating because of geopolitical tensions.
FULL PANEL OF THE CRISIS
Value Index
China's share of global solar cell production is more than 80%
Annual production capacity Over 1,000 GW
Global installed demand in 2025 About 600 GW
Businesses go bankrupt or delist from 2024 More than 40
Wasted solar power in early 2026 9%
Solar power was wasted in the same period last year: 6%
These numbers show that production capacity is far exceeding actual demand.
When everyone expands factories to gain market share, the end result is that the market is engulfed in a huge oversupply.
PARADOX: EXCESS POWER BUT UNUSED
TrunThe country has covered rooftops, hills and deserts with solar panels.
However, solar electricity is only generated during the day.
Meanwhile, peak electricity demand occurs in the evening.
As a result, the amount of excess electricity is increasing but cannot be used.
Percentage of solar electricity wasted
Year Rate
2025 6%
2026 9%
Increase up to 50% in just one year.
This is a signal that the power grid system is having difficulty absorbing the huge renewable energy source.
THE CHINESE GOVERNMENT HAS CHANGED ATTITUDE
For many years, solar businesses receive:
✅ Cheap land
✅ Preferential credit
✅ Interest rate support
✅ Fixed electricity purchase price
But now Beijing has changed its strategy.
New projects must sell electricity at market prices.
Many localities require refund of old subsidies.
Some businesses were allowed to go bankrupt instead of continuing to be bailed out by the budget.
This is considered the strongest cleanup in the history of China's renewable energy industry.
BIG MEN CANNOT ESCAPE FROM DIFFICULTIES
Names that were once considered invincible include:
* LONGi Green Energy
* Tongwei
* JinkoSolar
* Trina Solar
are all trading much lower than their previous peak.
The battery selling price is still lower than the average production cost of many businesses.
That means the more they sell, the more some manufacturers lose money.
US, EU AND INDIA TIGHTEN AT THE SAME TIME
Difficulties do not only come from within the country.
Major markets are increasing trade protection.Measures Area
US Tariffs and import restrictions
European Union Phase out Chinese equipment from funded projects
India Strengthens protection of domestic production
Exporting is increasingly difficult, causing Chinese manufacturers to lose an important part of the international market.
WHAT WILL HAPPEN NEXT
Experts say the solar power industry will not disappear.
On the contrary, long-term clean energy demand remains huge.
However, the period 2026–2028 could see:
A series of merger deals
Many small businesses go bankrupt
Large-scale layoffs
Invest heavily in electricity storage batteries
New generation high-performance battery technology
Focus on corporations with sufficient financial potential
CONCLUSION
What is happening in China is a classic lesson of the modern industrial economy.
As every business rushes to expand capacity in the belief that demand will increase forever, the market will eventually correct itself with a harsh purge.
China's solar panel industry is still number one in the world, but leadership does not mean profits.
And in the current "winter", the biggest question is no longer who will grow the fastest, but who will be able to survive until the next growth cycle appears.
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