Globe's Largest Solar Manufacturer Is Fueling a Price War

• The world's biggest solar manufacturer slashed prices for a key component as expanding capacity in the market escalates cost competition.

Chinese firm Longi Green Energy Technology Co. cut wafer prices by as long as 31% on Monday. Wafers are silicon squares that are wired up and pieced together to create solar panels.

The decrease comes after solar silicon prices have plunged by nearly half since very early February. A variety of new factories have actually ramped up production, finishing a lack of the product that interrupted the industry's supply chain last year.

Longi President Li Zhenguo cautioned last week that aggressive development in the solar supply chain can lead to excess capacity that compels majority the business in the sector closed in the following couple of years.

Longi shares dropped as long as 2% in Shanghai on Tuesday. Shares of TCL Zhonghuan Renewable Energy Technology Co., its top competitor in the wafer space, were little transformed in Shenzhen.