Solar Industry Faces Significant Losses in Q1 Amid Rising Prices

Price Increases, Declining Performance: The Solar Industry Struggles in Q1

As the annual report season concludes, leading solar companies have been disclosing their financial results. The significant losses experienced in 2024 due to an unprecedented industry downturn were somewhat anticipated. However, the performance in the first quarter of 2025, amid a policy-driven rush to install solar systems, has revealed that even top companies are still facing substantial losses, leading to one of the worst quarterly reports in history. This situation is a sobering reality check for industry professionals.

In 2024, the top ten solar companies collectively reported a loss of ¥22.3 billion. A simple comparison of the revenue performance of the solar manufacturing sector’s top ten in 2024 versus 2023 highlights the drastic changes within the industry. While losses began to surface in the fourth quarter of 2023, many leading companies still achieved historic highs in annual performance. Companies such as JinkoSolar and Trina Solar surpassed the ¥100 billion revenue mark, joining Tongwei Co. and LONGi Green Energy, both of which had already crossed this threshold for two consecutive years. This expansion resulted in a record number of four companies in the “¥100 Billion Club.” Moreover, seven of the top ten companies experienced revenue growth, with Sungrow Power Supply leading with a remarkable 79.47% year-on-year increase, while JinkoSolar exceeded 40% growth.

In terms of net profit attributable to shareholders, although Tongwei and LONGi saw a decline compared to the previous year, they still maintained profits exceeding ¥10 billion. Six of the top ten companies reported profit growth. However, by 2024, companies with revenues exceeding ¥100 billion had vanished from the list, and the top position changed hands. From 2019 to 2023, the top two positions alternated between Tongwei and LONGi, but in 2024, JinkoSolar surged to the top spot, pushing Tongwei and LONGi down to second and third, respectively. In the top ten, only Sungrow exhibited a 7.76% year-on-year revenue increase, while the others experienced declines. Notably, JinkoSolar, despite taking the first place, reported a 22.08% revenue drop.

Furthermore, the tenth-ranked battery leader Aiko Solar saw a staggering 58.94% decrease in revenue, dropping its rank to twentieth. Companies producing auxiliary materials and equipment generally experienced smaller revenue declines or recorded growth, with several improving their rankings. For instance, the leading auxiliary material company, Foster, broke into the top ten, while other prominent companies like Jiejia Weichuang and Xinyi Glass ranked eleventh and twelfth, respectively.

The net profit performance among the top ten is particularly concerning, with only Sungrow reporting profit growth. The company achieved a net profit of ¥11.04 billion, leading the sector. Sungrow’s main business revolves around solar inverters and energy storage products, which have seen increasing investments in downstream power station development. This performance contrasts sharply with the four major raw material companies (silicon feedstock, silicon wafers, solar cells, and modules), where six companies shifted from profit to loss, with three reporting losses exceeding ¥7 billion, and the largest loss nearing ¥10 billion. JinkoSolar and Canadian Solar remained profitable, but Jinko’s net profit fell to ¥99.93 million, a staggering 98.67% decrease year-on-year, while Canadian Solar’s profit dropped by 22.6% to ¥2.247 billion, with its annual report indicating significant pressure on its solar business, although its energy storage segment performed well. Foster, an auxiliary material company, reported a net profit of ¥1.308 billion, down 29.33% year-on-year.

Overall, the top ten solar companies collectively reported a net loss of ¥22.316 billion. If ranked by net profit attributable to shareholders, the top ten are Sungrow, Deye, Jiejia Weichuang, Jinglong, Canadian Solar, Hengtong East Magnetic, Foster, Aotaiwei, Xinyi Glass, and Maiwei. While Sungrow’s net profit exceeds ¥10 billion, the second-ranked Deye’s profit is below ¥3 billion, and the tenth-ranked Maiwei has only ¥926 million left. Nearly half of the nearly 80 companies in the sector are now in the red. Additionally, the top two in net profit are both inverter companies, while the third and fourth spots are occupied by equipment companies. Only the fifth and sixth positions can be considered raw material companies, but as previously mentioned, Canadian Solar’s energy storage business is thriving, and Hengtong’s diverse operations in magnetic materials, devices, and lithium batteries provide substantial support.

Even companies considered resilient, capable of withstanding cyclical pressures, have shown significant performance divergence. For example, Jieji Weichuang capitalized on the benefits of TOPCon production line upgrades, maintained a strong overseas market presence, and saw its semiconductor lithium battery business grow continuously, achieving a doubling of revenue and nearly 70% profit growth. In contrast, Jinglong, a veteran “equipment supplier,” has reported its first simultaneous decline in revenue and profit in a decade, with losses surfacing in the fourth quarter.

Beyond Sungrow, Deye, and Jieji Weichuang, the other companies in the top ten for net profit saw only minimal increases, with four experiencing year-on-year declines, the most notable being Xinyi Glass, which suffered a 63.52% drop. Factors contributing to the solar industry’s downturn include overcapacity, intense competition, price wars, and international trade fluctuations, all of which have been discussed extensively over the past year. LONGi Green Energy, which reported its first loss in a decade, described 2024 as “the most challenging year since the company’s listing,” citing significant declines in product prices and gross margins across the industry due to supply-demand mismatches and irrational price competition. The company acknowledged that its poor performance also resulted from a buildup of mismanagement, which includes delays in addressing issues such as the disconnect between the research, production, and sales of new products and the imposition of tariffs in the United States.

In Q1 2025, the leading companies faced declines in both revenue and profit. Anticipation for the solar industry in 2024 was already low, but expectations for the first quarter had been relatively high. The primary reason for this optimism stemmed from production cuts initiated last year, which were expected to yield some benefits this year, along with a slew of policies introduced at the beginning of the year that spurred downstream demand. The management measures introduced on January 17, 2025, for distributed photovoltaic power generation and the February 9 notice on deepening market reforms for renewable energy pricing established timelines for new and existing projects. This prompted downstream developers to rush to initiate projects in advance of two key deadlines, “430” and “531,” to secure price differential settlement qualifications and mitigate investment and market volatility risks.

This led to a resurgence in demand for installations, resulting in a temporary supply shortage for solar manufacturers, which in turn caused prices to rise. Throughout the first quarter, according to statistics from InfoLink, if we exclude cross-year weeks starting from January 8 until the end of March, the prices for mainstream products saw significant increases: silicon feedstock rose by 5.56%, silicon wafers surged by 16%, solar cells jumped by 21.43%, and even the previously declining modules saw a 7.25% increase.

However, despite these price increases, the leading companies still faced considerable pressure on their performance, as revealed in the Q1 reports. Among the top ten in terms of revenue, Sungrow achieved its best quarterly results ever, topping both revenue and net profit charts, largely due to the incremental gains from the installation rush. In contrast, the revenue of the second to seventh-ranked raw material leaders all declined in both year-on-year and sequential comparisons. Given that Q1 saw national solar installations of 59.71 GW, representing a year-on-year increase of 30.5%, coupled with rising prices, this performance is evidently disappointing. Current information indicates that overseas market shipments have been affected, and production cuts, inventory management, and holding stock to reduce losses may be the main influencing factors.

In terms of net profit attributable to shareholders, among the top ten, only Sungrow, Hengtong East Magnetic, and LONGi Green Energy reported positive figures. The other raw material leaders experienced significant declines, with Canadian Solar barely staying above water, while JinkoSolar shifted from profit to loss. Although there was a price increase in Q1 compared to the previous year, silicon feedstock, silicon wafers, solar cells, and module prices fell by over 30%, 30%, 30%, and 22% respectively, and considering that production costs did not significantly decrease and that high-margin markets in Europe and the U.S. were impacted, such steep year-on-year declines were somewhat expected.

Simultaneously, the quarter-on-quarter performance illustrates how different companies are responding to industry changes. Among the top ten, companies like Sungrow, Tongwei, Trina, LONGi, JA Solar, TCL Zhonghuan, and Aiko experienced improvements, while JinkoSolar, Canadian Solar, and Hengtong East Magnetic showed weakening performance. Interestingly, the companies that improved were typically those that had faced significant declines in the previous year, while those that weakened had been relatively resilient. This reflects the ongoing escalation of the industry’s crisis. Additionally, companies that began reporting losses in Q4 2023 often made considerable adjustments to their production and sales policies to focus on inventory reduction and cost-cutting, while those that had previously ensured profitability became more aggressive in capacity and shipment pursuits to capture market share for TOPCon new products, leading to higher inventories and greater pressure from price declines and impairments. As the industry faces intensified technical competition and policy shifts in Q1 2025, profits will face even greater challenges.

Looking at Q1 performance alone, the BC dual leaders, LONGi Green Energy and Aiko, delivered results that surprised some investors. The former reported a notable improvement in net profit, attributing it to enhanced inventory management that reduced losses from inventory write-downs, effective cost-cutting measures, and the transfer of remaining shares in Zhongjing Technology to accounts for financial assets, thus increasing investment income. Aiko has returned to the top ten and exceeded expectations in product shipments, particularly in its newly developed BC module business, achieving a Q1 shipment of 4.54 GW, which already accounts for 70% of its expected annual total for 2024, with both year-on-year and sequential revenue growth, positive operating cash flow, and a narrower loss in net profit. The company credits this success to the increasing sales proportion of its N-type ABC module business and continuous reductions in production costs, leading to quicker inventory turnover and significantly less negative impact from inventory write-downs.

As of April, prices across the solar industry chain have begun to decline once again, indicating that companies will face even greater fluctuations in performance in Q2. If the BC products can maintain their strong performance, the competition within the solar industry’s technological landscape may become even more intense this year.