Strengthening Core Competencies: Solar Industry Poised for Turning Point in 2024

The solar energy industry is currently experiencing a significant phase of supply and demand imbalance, with prices across the supply chain remaining low and many leading companies facing varying degrees of losses. In this context, Tongwei Co., a leading player in the solar sector, held its annual shareholder meeting on May 20, 2024, which gained considerable attention. During the meeting, the company addressed key issues of interest to the market. Tongwei’s Chairman and CEO, Liu Shuqing, stated, “The solar industry will still be in an adjustment period in 2025, and our focus is on strengthening our internal capabilities.“

Industry Restructuring Accelerates

After years of rapid growth, the solar industry is now facing pronounced supply-demand conflicts, with prices along the main supply chain remaining low and companies generally suffering significant losses. Liu Shuqing analyzed, “2024 will be a harsh winter for the solar industry. The rapid development from 2020 to 2022 drew substantial external capital, leading to a temporary mismatch in supply and demand. During prosperous periods, module prices were around 2 yuan/W, but they have now dropped to less than 0.7 yuan/W. The price of silicon materials has also plummeted from a peak of 300,000 yuan/ton to below the cost line of major producers. In the second half of this year, the industry will continue to experience a survival of the fittest, with outdated capacities and technologies being eliminated, and high-cost capacities struggling to survive.

“Although the solar industry is in a winter phase, it won’t get worse than it is now. We expect to see signs of improvement in the latter half of this year, but a complete clearing of capacity will take time, possibly until next year,” he added. Tongwei’s Vice Chairman, Yan Hu, further stated, “The Chinese solar industry has evolved from nothing to a substantial presence, from catching up to running alongside global leaders. This adjustment is different from previous ones; after it concludes, the industry will enter a phase of normal development, and the era of exorbitant profits will be over.“

Increased R&D Investment

Liu Shuqing emphasized, “The winter of 2025 for the solar industry is expected to persist, and the colder it gets, the more we must strengthen our internal capabilities. In this harsh environment, the competition will be about the foundational strength of each company, such as whether they have sufficient cash flow and maintain technological leadership.” As of the end of the first quarter of 2025, Tongwei had approximately 40 billion yuan in cash and financial assets, which effectively meets the company’s liquidity needs. The company also has a rich array of financing tools and ample bank credit, ensuring smooth access to short-term financing and medium-term notes.

Yan Hu mentioned, “We have increased our cash reserves to prepare for extreme scenarios in the future.” Tongwei’s Chief Financial Officer, Zhou Bin, stated at a performance briefing on May 16 that the solar industry is currently at a cyclical low point. The company will prudently assess projects yet to commence construction, control the pace of construction, and strictly manage capital expenditures to ensure liquidity safety.

Tongwei adheres to the principle that “science and technology are the primary productive forces,” with a total R&D investment exceeding 11 billion yuan over the past three years. Liu Shuqing added, “We maintain an open attitude towards R&D in both silicon materials and cell technology, with no upper limit on R&D investment. While consolidating our leading position in TOPCon mass production technology, we will continue to increase R&D investment in HJT, perovskite, and other technologies to create a diversified technological reserve.“

Confidence in Solar Industry Outlook

Liu Shuqing remarked that the recent survival of the fittest in the solar industry is beneficial as it enhances the capabilities of enterprises within the supply chain, leading to more advanced technology, faster R&D, and lower product costs. “We believe that under China’s ‘dual carbon’ goals and the global energy transition, the development prospects for the solar industry remain vast.” Yan Hu noted that globally, solar power remains the most economical and universally applicable energy solution, making it the optimal choice for energy transition. In 2024, approximately 530 GW of new global solar installations are expected, marking a year-on-year increase of 35.9%. The company anticipates that overseas installation scales will continue to grow well.

The expansion into overseas markets is also a focal point for shareholders. Liu Shuqing stated, “Tongwei entered the module sector at the end of 2022, initially focusing on the domestic market. From last year, we began to push into overseas markets, but currently, overseas revenue accounts for a relatively small share of total income. We hope to achieve breakthroughs in the overseas market this year, aiming for a future where revenues from both overseas and domestic markets each constitute half.“

With strong confidence in future development, Yan Hu asserted, “Tongwei aspires to be a century-old enterprise. Since our listing, the major shareholders have not reduced their stakes except for a specific transfer to support an employee stock ownership plan in previous years. Last year, the company also engaged in significant stock buybacks and increases, demonstrating our confidence in the company’s growth.“