China's Solar Sector Faces Prolonged Glut, Longi Seeks Innovation

Jul 8, 2024 01:25 PM ET
  • China's solar sector faces prolonged losses and oversupply, with Longi Green Energy Technology Co. struggling to break even in the near future.

China's solar sector, including major manufacturer Longi Green Energy Technology Co., is facing continued losses and oversupply for up to two years, according to analysts. Longi has stated that prices are unlikely to surpass costs in the near future, leading to industry-wide losses persisting due to oversupply.

The deepening glut in China's solar industry is a result of production exceeding demand, with major firms like Longi reporting losses in the first quarter. Longi is focusing on new technology that is more efficient in converting solar energy into electricity, but it is not yet cost-competitive. Analysts caution against expecting a fundamental recovery in the sector, with Longi predicting only a slight price recovery in the next three months.

Is China's solar industry facing prolonged losses and oversupply?

  • The oversupply in China's solar industry is expected to persist for up to two years, leading to continued losses for major manufacturers like Longi Green Energy Technology Co.
  • Longi has stated that prices are unlikely to surpass costs in the near future, further exacerbating the industry-wide losses.
  • The production exceeding demand in the solar industry has resulted in a deepening glut, with major firms like Longi reporting losses in the first quarter.
  • Longi is focusing on developing new technology that is more efficient in converting solar energy into electricity, but it is not yet cost-competitive.
  • Analysts are cautioning against expecting a fundamental recovery in the sector, with Longi predicting only a slight price recovery in the next three months.
Source:
bloomberg.com

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