China's solar manufacturers reported $1.5 billion in losses in the first quarter of 2026 as oversupply triggered price wars. The country maintains enough production capacity to meet roughly twice global demand yet continues to expand facilities and upgrade supply chains.
Chinese firms have built factories capable of producing twice the world's solar needs, according to Rhodium Group analysis. This imbalance has driven prices sharply lower, with manufacturers like JinkoSolar and Longi reporting ongoing unprofitability for three years.
Government efforts to limit overproduction have had limited effect. Officials designated solar a strategic sector in 2010 and continue to prioritize advanced manufacturing over capacity cuts, as noted in a recent Rhodium Group report.
The resulting low prices have supported global renewable growth. Solar generated more U.S. electricity than coal for the first time in May, while clean sources met all new worldwide electricity demand in 2025, Ember data showed.
Industry observers expect prices to remain low. Hannah Pitt of Rhodium Group stated that data points to continued affordability for the foreseeable future.