Encouraging Innovation and Strengthening Leaders: A Sustainable Solution to the Over-Competition Crisis in the Photovoltaic Industry

Encouraging Innovation and Supporting the Strong: A Sustainable Solution to the Over-Competition in the Photovoltaic Industry

On September 15, the National Bureau of Statistics reported that the year-on-year decline in the Producer Price Index (PPI) for industrial producers narrowed significantly in August. Fu Linghui, spokesperson and chief economist of the bureau, stated at a press conference that this improvement was due to various factors, including the active promotion of industry self-discipline, the advocacy against disorderly competition among enterprises, and efforts to manage production capacity in key industries.

Notably, prior to the release of the PPI data, there had already been a price increase in the photovoltaic supply chain. For example, the production cost of silicon wafers generally ranged from 1.2 to 1.45 yuan per unit, while the price rose to between 1.25 and 1.6 yuan in August.

However, the damage caused by low-price competition extends beyond mere losses; it also leads to reduced investment in research and development (R&D), stifling innovation within companies and the entire industry. According to incomplete statistics, the semi-annual report for 2025 indicates that among 15 leading photovoltaic companies, only Trina Solar, TBEA, TCL Zhonghuan, and Hightime New Energy saw an increase in R&D expenses compared to the previous year. In the first half of 2025, these 15 companies collectively reported approximately 5.101 billion yuan in R&D expenses, a decrease of 922.5 million yuan compared to the first half of 2024.

In the face of intense competition, it is understandable that companies might tighten their budgets. Nevertheless, the photovoltaic sector is fundamentally driven by long-term innovation, and a slowdown in innovation is detrimental to both individual companies and to maintaining China’s leading position in the global photovoltaic market. In challenging times, companies should prioritize innovation. So, where can photovoltaic companies currently find breakthroughs in innovation?

Technological Breakthroughs: BC Technology Sets New Efficiency Standards

The technological pathway significantly influences the future of photovoltaic companies and reflects industry development trends. A classic example is the replacement of PERC (Passivated Emitter and Rear Cell) technology by TOPCon (Tunnel Oxide Passivated Contact) technology. Data indicates that the theoretical conversion efficiency limit for TOPCon cells is 28.7%, surpassing the 24.5% limit of PERC cells. As market pressures continue to drive innovation, it is only natural for more efficient and cost-effective TOPCon cells to replace PERC cells.

Currently, as the conversion efficiency of TOPCon cells approaches their theoretical limit, photovoltaic companies face another choice in their technological pathways. Observers have noted that the previously overlooked BC (Back Contact) technology is gradually gaining attention from enterprises. In addition to pioneers like LONGi Green Energy and Aiko Solar, companies such as Tongwei Co., GCL-Poly, TCL Zhonghuan, and JA Solar have also made significant investments in BC technology.

In the first half of this year, Aiko Solar’s ABC module shipments increased by 400% year-on-year, reaching 8.57 GW. This achievement allowed Aiko Solar to become one of the few companies to report quarterly profits amidst widespread industry losses. This success has not only boosted Aiko Solar’s morale but has also strengthened the confidence of other firms investing in BC technology.

What makes BC technology so compelling? It is considered the ultimate technological pathway for monocrystalline silicon cells, with theoretical conversion efficiencies exceeding those of TOPCon and other technologies. Furthermore, BC technology is a platform technology that innovates the structure of solar cells, allowing for integration with various photovoltaic technologies, thus presenting numerous possibilities. For instance, LONGi Green Energy’s HPBC (High Efficiency Back Contact) cell combines the advantages of passivated emitters and PERC with a back contact design. Additionally, TOPCon cells can be combined with BC technology to create TBC cells, and HJT (Heterojunction Technology) can be integrated with BC to form HBC cells. The differences in these technologies stem from varying production complexities and costs.

From the current trends, it is clear that the industry is pivoting towards BC technology. However, companies must learn from the rapid expansion of TOPCon cells to avoid repeating past mistakes.

Addressing Systemic Issues: Encouraging Innovation and Protecting Patents

The crisis of over-competition stemming from the rapid expansion of TOPCon technology can be attributed not only to misallocation of resources due to financial capital and local policies but also to low technological barriers and inadequate intellectual property protection. It is understood that TOPCon technology is highly compatible with traditional PERC processes, allowing for easy upgrades to production lines, which accelerated its capacity expansion. Additionally, the early prevalence of a “take-it-or-leave-it” approach within the photovoltaic sector, combined with weak intellectual property protections, significantly contributed to the rapid diffusion of TOPCon technology.

This swift spread lowered the entry barriers for companies, while the support of financial capital and local policies ultimately led TOPCon into a trap of homogenization. However, it is essential to note that significant disparities in technological capabilities still exist among different companies. Currently, the average efficiency of second-tier TOPCon manufacturers is about 25.5%, whereas leading firms like Jinko Solar, JA Solar, and Trina Solar boast certified conversion efficiencies exceeding 26%.

From an anti-competitive perspective, the commonly perceived “supply-demand mismatch” should certainly not encompass the efficient TOPCon products. The market should eliminate those capacities that struggle at the average efficiency level and lack innovation. In a sense, both the leading TOPCon technology and the emerging BC technology fall under the category of “advanced production capacity,” both requiring government support, guidance, and protection for their development.

To prevent the pitfalls of previous “take-it-or-leave-it” mindsets from adversely affecting the growth of “advanced production capacities,” the national government should encourage innovation while simultaneously strengthening patent protections. Ultimately, safeguarding intellectual property equates to protecting innovation and combatting over-competition. As Wang Bohua, honorary president of the China Photovoltaic Industry Association, has stated, optimizing and upgrading intellectual property governance is crucial for optimizing and adjusting industrial structures.

How can the photovoltaic industry enhance its intellectual property protections? Ma Yide, dean of the Intellectual Property Institute at the University of the Chinese Academy of Sciences, has offered several recommendations: first, establish a multi-tiered collaborative innovation system at the micro, meso, and macro levels; second, improve the benefit adjustment mechanism, create patent pools to lower innovation costs in the industry, and explore the establishment of patent joint ventures to avoid vicious competition; third, innovate governance tools to monitor and analyze the global patent landscape in real-time.

On September 19, LONGi Green Energy and Jinko Solar announced a commercial arrangement for cross-licensing certain core patents they hold. This proactive initiative by these leading companies marks a positive step towards improving intellectual property protection within the photovoltaic sector.

Proactively Seeking Change: From Price Wars to Value Wars

Transitioning from zero to one is inherently challenging. New technologies and products are innovative and advanced, but their integration into the market requires a transformation from introduction to establishment, then to scaling production and even substituting existing solutions. For instance, LONGi Green Energy’s HPBC1.0 product initially faced issues with production yields, which were resolved through process upgrades. Now, LONGi’s BC products are excelling, with yields for the HPBC2.0 product exceeding 97%. In the first half of this year, the HPBC2.0 product was also well-received by international customers, with global shipments reaching approximately 4 GW.

Similarly, other photovoltaic companies must navigate this transformation process for their new technologies and products. During this evolution, companies need to tackle technical challenges while ensuring the entire production, marketing, and application chain is effectively connected, thereby establishing the economic viability of their innovations.

While leading companies can spearhead the establishment of relevant industrial ecosystems, bridging the gap between technology and products also requires encouragement, support, and guidance from the government. Currently, as efforts to combat over-competition in the photovoltaic sector deepen, some local governments and state-owned enterprises have begun taking action.

For example, at the beginning of this year, Shaanxi Province announced a 2 GW “Leading Enterprise Plan” for photovoltaic projects, requiring module conversion efficiencies to exceed 24.2%. This efficiency standard is significantly higher than the current industry average. Through the “Leading Enterprise Plan,” the market has felt the government’s determination to strengthen and optimize the photovoltaic industry.

Similarly, state-owned enterprises like China Huadian Corporation and China Huaneng Group have recently raised the efficiency threshold to 23.8% in bidding for large-scale wind and solar projects. This elevation of standards serves as a benchmark for the next phase of renewable energy development and construction, reflecting a shift in investment logic among project owners and helping the industry move away from low-price competition towards value-oriented competition.

With the support of the government and state-owned enterprises, new technologies and products can quickly navigate their commercial pathways and firmly establish themselves in the market. Once these innovations overcome the challenges of scaling production and experience significant growth, the market can truly escape the quagmire of homogenized competition. Therefore, encouraging innovation and supporting the strong is indeed a long-term solution to the over-competition facing the photovoltaic industry.