For the first time, China’s exports of solar polysilicon have surpassed imports, a key development in the supply chain of global solar panels. In 2024, the country exported more than 40,000 tons of polysilicon against about 39,800 tons imported, driven by high production exceeding demand and firms relocating some production lines abroad.
Polysilicon Market Dynamics
Polysilicon prices in China have plunged about 90% over the last two years because of severe oversupply, resulting in force reductions in output by producers. Even with reduced output, market conditions remain difficult. Pre-holiday stocking by downstream companies has kept trading unheavy, though the launch of polysilicon futures helped to bridge price expectations. Analysts expect prices for polysilicon to bounce back after the holiday due to a self-regulating industry and inventory reduction at the downstream levels.
Renewable Energy Capacity Beats Expectations
The renewable energy sector in China has grown phenomenally. The country installed 277 GW of solar capacity and 80 GW of wind capacity in 2024, achieving its 2030 renewable energy target six years in advance. Forecasts for 2025 show further momentum, with an additional 273 GW of solar and 94 GW of wind capacity to be added, driven by state-owned developers and regional governments.
It revised policies of distributed solar energy, wherein large-scale projects are asked to give priority to self-consumption of power generated. In this regard, the adjustment is expected to help better utilize energy supplies and cut stress on the power grid.
Challenges within the Solar Industry
Still, even with these results, challenges do loom over the Chinese solar industry. Major companies like Tongwei Co., JinkoSolar, and Daqo New Energy have issued cautious annual earnings guidance due to mismatches in supply and demand. Oversupply issues still remain very heavy on the profitability of the entire sector.
Besides, the country’s energy market is signaling weakening demand. For the very first time, the Zhejiang province registered negative prices for its electricity spots-a signal of surplus power supply and softened demand. This development puts a question on the various solar expansions’ sustainability concerning the reduced energy consumption.
Outlook
The ability of China to expand its renewable energy capacity at unprecedented speeds shows its leading role in the global clean energy transition. Nevertheless, balancing production with demand and profitability remains one of the key challenges. As the world’s largest producer and exporter of solar components, the strategies China pursues to avoid oversupply and to achieve sustainable growth will have far-reaching implications for the global renewable energy market.
