China’s photovoltaic sector is out of breath. There is one reason

Luc Williams

Photovoltaic module maker and solar project developer Longi believes prices are unlikely to rise enough to exceed production costs anytime soon. “Industry-wide losses will continue amid oversupply,” Citi Research said in a note Monday based on information from Longi.

Oversupply plagues China’s photovoltaic sector

The Chinese photovoltaic industry is a global leader in the industry. However, Currently, the sector is struggling with increasing market saturation after production far exceeded demand in recent years. In the first quarter of this year, China’s largest photovoltaic companies, including Longs reported losses because they were forced to sell below cost.

Manufacturer The photovoltaic module manufacturer and solar energy project developer believes that its existing products are unlikely to be profitable in the foreseeable future. That’s why Longi is betting on a new technology that it believes converts solar energy into electricity more efficiently. Citi said in a note that Longi’s new product is more advanced but not yet cost-competitive.

The coming years will be lean

“We see no catalyst for a fundamental recovery in the sector and suggest investors not place false hopes on a solar revival,” Daiwa Capital analyst Dennis Ip said in a note on Thursday, adding that Longi predicts slight price improvement in next three months.


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