China's photovoltaic (PV) industry posted a starkly contrasting performance in the first half of 2026. According to the latest data from the National Energy Administration, domestic new PV installations reached 72.07 GW in the first half of the year, a sharp decline of approximately 66% compared to the same period last year, ending several years of rapid growth. Simultaneously, the semi-annual performance forecasts from the A-share PV sector reveal a more brutal reality. Based on incomplete statistics, 21 listed PV companies that have released forecasts collectively project a net loss of 13 billion to 16.8 billion yuan for the first half of the year, with the main industry chain almost entirely "bleeding." The "three giants" alone—LONGi Green Energy Technology Co., Ltd. (601012.SH), Tongwei Co., Ltd. (600438.SH), and TCL Zhonghuan Renewable Energy Technology Co., Ltd. (002129.SZ)—are expected to account for combined losses exceeding 10 billion yuan in the first half of the year.

Losses and Divergence

Affected by the high base of installation rush in the first half of 2025 and insufficient new energy consumption capacity, domestic installations experienced a periodic pullback, directly leading to declines in both sales volume and revenue for module leaders. LONGi Green Energy Technology Co., Ltd. (601012.SH) is expected to report a net loss of 3.4 billion to 3.8 billion yuan for the first half, with losses widening year-on-year. The company attributed its difficulties in its announcement to low capacity utilization rates, compressed gross margins, and exacerbated exchange rate losses. Tongwei Co., Ltd. (600438.SH), a dual leader in polysilicon and cells, expects a loss of 4.8 billion to 5.4 billion yuan for the first half, the largest loss in the industry, due to no fundamental improvement in industry supply-demand imbalance and persistently low product prices. JA Solar Technology Co., Ltd. (002459.SZ) reported a loss of 2.4 billion to 2.9 billion yuan for the first half. The company believes that "besides the domestic 'involution,' the tax burden from the abolition of export tax rebates and international trade frictions are also major factors dragging down performance."

Amid the widespread pressure on main chain companies, signs of divergence have emerged. For instance, TCL Zhonghuan Renewable Energy Technology Co., Ltd. (002129.SZ) stated in its performance forecast that thanks to a more than 13% year-on-year reduction in non-silicon costs for the wafer segment and a structural optimization with a nearly 40% year-on-year increase in module business revenue, the company expects a loss of 3 billion to 3.3 billion yuan for the first half, with the loss narrowing by 22.21% to 29.28% year-on-year. Hoshine Silicon Industry Co., Ltd. (603260.SH) achieved a turnaround from loss to profit in the first half by actively scaling back PV business investments, refocusing on its core silicon-based business, and benefiting from improved supply-demand dynamics in the organic silicon sector and a rebound in industrial silicon prices.

However, contrasting sharply with the bleak performance of main chain companies, the auxiliary materials sector staged a strong counter-trend breakout. Sub-sectors such as energy storage, equipment, and core consumables demonstrated performance resilience. Deye Technology Co., Ltd. (605117.SH) is expected to report a net profit of 2.668 billion to 2.728 billion yuan for the first half, a year-on-year increase of over 75%, achieving nearly 85% of its total profit for the entire previous year in just half a year. Hangzhou First Applied Material Co., Ltd. (603806.SH), a leader in PV encapsulant films, saw its net profit increase by 75.35% year-on-year, driven by raw material prices rising due to the Middle East geopolitical conflict and increased volume from new products.

Industry analysis suggests that these companies have avoided the severely overcapacity crystalline silicon manufacturing segment, benefiting from the global resonance of energy storage demand and healthy supply-demand dynamics in their sub-sectors, thus securing performance realization first.

Initial Signs of a Turning Point

"Although the output of various links in China's PV industry chain—polysilicon, wafers, cells, and modules—all declined year-on-year in the first half, this precisely indicates that the inflection point for a reversal is approaching." Liu Yiyang, Executive Secretary-General of the China Photovoltaic Industry Association, stated at the conference. He noted that the current "involution-style" competition facing the industry has not fundamentally changed, but many things are evolving. The release of mandatory national standards and industry standards provides a solid institutional guarantee for regulating the order of competition and guiding industrial upgrading.

Facing an unprecedented industry "winter," the photovoltaic sector's "anti-involution" is no longer just a slogan. "Hard constraints" on the supply side are forming. For example, three mandatory national standards on PV energy consumption and energy efficiency, jointly issued by ministries including the Ministry of Industry and Information Technology, will take effect on January 1, 2027. Industry analysts suggest that the new national standards set clear entry barriers for polysilicon, wafers, and modules. It is expected to force the orderly exit of an estimated 20%-30% of outdated capacity that remains non-compliant even after technological upgrades.

At a parallel forum, senior executives from companies like Trina Solar Co., Ltd., Aiko Solar Energy Technology Co., Ltd., and Dawn Energy Co., Ltd. proposed a consensus on a breakthrough strategy: "seeking premium prices through technology." They believe the core solution to breaking homogenized competition is to allow "good products to command good prices." Only when technological innovation translates into realized profits can the industry enter a positive cycle. "Quality is the lifeline of any industry. Low-price competition must never come at the cost of product quality. Once a brand is bankrupt, there is no chance for a comeback."

Liu Yiyang also called for the PV industry to shift from "competing on price" to "competing on technology, quality, and differentiation," transitioning from scale expansion to value reconstruction.

Looking ahead, positive signals from the demand side are also accumulating. In the view of Yao Yao, Chief Analyst for New Energy at Guosheng Securities, although domestic installations this year will likely see their first full-year negative growth since grid parity, the turning point may not be far off. He believes that "as the market-oriented reform of the electricity sector deepens, results from competitive bidding in provinces with high solar penetration, such as Gansu and Yunnan, show that on-grid solar tariffs have already shown signs of bottoming out and rebounding. Mechanism tariffs are gradually becoming more rational, which will significantly improve the returns on power station projects." Yao Yao also indicated that with the implementation of new consumption models like green electricity direct connection and green computing, alongside energy storage allocation to alleviate consumption pressure, domestic demand is expected to return to growth in 2027. "The current price and profit floor for the industry chain has been largely cemented. The efficiency improvement and silver-reduction technological upgrades by leading companies are accelerating the elimination of outdated capacity. Companies with product and capacity advantages are expected to be the first to reach an operational inflection point."