Key facts
- Jinko Solar, JA Solar Technology, and Tongwei reported significant losses in the first half of 2024.
- New solar power capacity additions in China fell to 72.07 GW in H1 2024 from 212.2 GW a year earlier.
- JA Solar cited temporary and structural overcapacity issues despite policy efforts.
- Chinese solar equipment exports decreased by 21.4% last month compared to the previous year.
- China's total solar power capacity is now 1,274 GW, nearly matching its 1,275 GW of coal-fired capacity.
China's leading solar manufacturers, including Jinko Solar, JA Solar Technology, and Tongwei, have reported substantial losses for the first half of the year. This downturn signals a significant challenge for the industry, which has been a global leader in both production and deployment of solar energy.
The overcapacity within China's solar sector, coupled with weakening domestic demand, is a primary driver of these financial struggles. New solar power capacity additions in the country saw a dramatic decrease, falling to 72.07 GW in the first half of the year from 212.2 GW in the same period last year. This slowdown is partly attributed to a rush to connect projects before a planned electricity-pricing reform in 2025, which created an unusual baseline for that year.
JA Solar acknowledged the ongoing issues, stating that the full impact of policies requires more time for transmission and validation, and that capacity reduction and consolidation effects have not yet fully materialized, leaving the industry with temporary and structural overcapacity. Adding to the industry's woes are international trade barriers, particularly U.S. tariffs on Chinese solar equipment, which have further dampened overseas demand. Jinko Solar noted that trade barriers have been comprehensively upgraded, forcing a reshaping of traditional export channels.
Further complicating matters, the Chinese government canceled an export tax rebate for solar manufacturers in April, intensifying the pressure. Data from Chinese customs revealed a 21.4% year-over-year decline in solar equipment exports last month. Despite this slowdown in new installations, China's total solar power capacity is on the verge of surpassing its coal-fired capacity, standing at 1,274 GW as of the end of June, just shy of the 1,275 GW of coal capacity.