Beijing’s solar reset shows early traction as prices stabilize

The recovery follows a series of government–industry meetings and proposals aimed at curbing disorderly competition. Measures under discussion include limiting power use at manufacturing plants and tightening enforcement against below-cost selling, effectively nudging producers to align output with demand. The signal to the market is clear: the era of unchecked capacity additions and destructive price undercutting is ending, even if consolidation remains politically and operationally complex.

Price stabilization is filtering through the value chain. Rising polysilicon and wafer prices reduce losses at the upstream and help module makers plan production with more predictable margins, improving bankability for downstream projects. Fundraising by major players to upgrade or rationalize capacity, alongside efforts to standardize contracts and curb speculative inventory, suggests the sector is repositioning for healthier utilization rather than sheer volume growth.

Risks have not disappeared. Enforcement consistency across provinces, local protectionism and the temptation to chase share as prices firm can all derail discipline. Global demand remains strong but cyclical, and trade frictions add uncertainty to export-heavy segments. Still, if current gains hold into year-end and capacity governance improves, China’s solar supply chain could move from crisis stabilization toward a more sustainable pricing regime, one that supports ongoing cost declines in solar power without wiping out producer profitability.