Navigating the Post-Panic Phase of the PV Market: Strategies for Surviving the Transition

The surge in photovoltaic (PV) installations is receding; how can companies adapt?
On April 20, 2025, the introduction of Document No. 136 marked the beginning of a new era for renewable energy, fully integrating it into the electricity market. The policy specifies that from June 1, 2025, all new distributed PV projects must participate in market bidding, with electricity prices determined by supply and demand. Projects that were connected to the grid before this date will still benefit from transitional policies, allowing them to enjoy full feed-in tariffs or price subsidies.
This policy led to a rush of installations with two critical deadlines:

• April 30: Commercial distributed projects needed to be connected to the grid by this date to maintain their full feed-in tariff qualification, resulting in a significant spike in demand for components in the first quarter. For instance, in Shandong, the registration of distributed PV projects surged by 230% year-on-year from January to March 2025, with some companies adopting a “build first, compensate later” strategy to secure resources.
• May 31: New projects were required to enter the market fully, leading to heightened uncertainty in electricity pricing. This compelled developers to rapidly secure low-cost components. Leading companies like Longi and Jinko reported order volumes exceeding 30GW in the first quarter of 2025, nearly tripling their figures from the same period in 2024.

Although the policy was intended to facilitate a smooth transition for existing projects, the overall influx of renewable energy led to a chaotic rush among virtually all distributed PV installations. The imbalance between market supply and demand quickly revealed industry issues. Component prices skyrocketed from 0.63 CNY/W at the end of 2024 to 0.80 CNY/W by March 2025, with some high-efficiency products commanding a premium of up to 0.10 CNY/W.
Who is “bare swimming”?
During the initial phase of the installation rush, component prices soared. Major manufacturers profited significantly, while some companies colluded to drive prices up to nearly 0.90 CNY/W. This was a stark increase compared to the previous year. An investor from Zhejiang reported that he signed a price-fixed contract at 0.69 CNY/W in early March with a leading manufacturer, only to have the price unilaterally raised to 0.74 CNY/W the next day, with a contract breach rate reaching 40%.
Some manufacturers even invalidated their quotes within the same day, displaying a complete disregard for contractual obligations. Another investor stated that his ordered components had already arrived at the project site but were sold at a higher price to another project before they could be unloaded, forcing him to redirect the shipment.
In addition to price increases, some companies began selling “knock-off” components. Previously, companies like Trina, Aiko, GCL, and Chint announced the discovery of unauthorized sales of their brands through unofficial channels. Insiders suggested that this may have resulted from subcontractors acting without authorization, engaging in a “half manufacturing, half selling” practice.
As the installation rush subsides and component prices begin to decline, manufacturers that previously engaged in reckless contract breaches and disrupted market order now face a severe trust crisis. The foundation of business cooperation is integrity; when companies frequently betray their clients’ trust, how can they hope to establish themselves in the industry in the future?
How to adapt?
With recent drafts for distributed PV management guidelines being circulated in various provinces, the lack of restrictions on the self-use proportion for general commercial enterprises has somewhat diminished the urgency for installations. As April progressed, component prices began to stabilize. The market is now entering a deep adjustment period. However, previous irrational behaviors have created multiple risks:

• Price Bubble Burst: By mid-April, component prices fell to the range of 0.75-0.80 CNY/W, marking a 10%-15% decline from March’s peak. Some second-tier manufacturers that hoarded components now face inventory devaluation pressures.
• Collapse of the Credit System: Contract breaches have exacerbated mistrust between manufacturers and investors. A leader from an EPC company in Hebei remarked, “Contracts must now include ‘price linkage clauses’; otherwise, no one dares to accept orders.”
• Increased Revenue Uncertainty: Projects entering the market after June 1 will confront price fluctuations in the electricity spot market. For example, the average spot price for PV in Shandong was only 0.11 CNY/kWh in November 2024, dropping as low as 0.03 CNY/kWh, which is over 90% less than the coal benchmark price of 0.3949 CNY/kWh.

Industry analysts predict a potential “demand cliff” in Q2 2025. According to SMM data, approximately 40GW of components were scheduled for production in Q1 2025, but the operational rate fell below 30% after April, resulting in an extended inventory turnover period of 60 days.
So far, provinces like Guangdong, Jiangsu, Jilin, Ningxia, Hainan, Chongqing, and Guangxi have released their latest drafts or guidelines for distributed PV management. The absence of self-use proportion clauses in Guangdong and Jiangsu has garnered significant support from local investors, alleviating the urgency for installations.
As the installation rush winds down, distributed PV construction across various regions must adapt to new policies. Projects starting after June 1 will need to participate fully in electricity market transactions, with prices governed by supply and demand. This signifies:

• Complete withdrawal of subsidies: Commercial projects will no longer enjoy fixed electricity prices, leading to increased revenue uncertainty.

The industry now urgently needs transformation in several areas:

• Electricity Trading: For instance, the “wall-to-wall electricity sales” model piloted in Zhejiang allows distributed PV to participate in green electricity trading through aggregators, potentially enhancing project profitability by 39%.
• Storage Revenue: In regions like Shandong and Zhejiang, where negative prices are frequent, utilizing storage systems to adjust peak and valley power output can improve project economics.
• Technical Optimization: The efficiency breakthroughs in perovskite-silicon tandem cells exceeding 33% may see early commercial application in distributed scenarios, potentially reshaping the technological landscape. Companies need to increase R&D investments to secure technological advantages.

The decline of the installation rush signifies a pivotal shift in the PV industry from policy-driven growth to market-driven dynamics. Moving forward, the industry must seek a balance in technological innovation, capacity optimization, and global strategies to transition from “scale expansion” to “high-quality development.”