The new reality for photovoltaic module manufacturers: reshaping the global market landscape

The New Reality for PV Module Manufacturers: Reshaping the Global Market

The global photovoltaic industry is at a critical turning point. With rapid capacity expansion, ongoing price wars, and accelerating technological iteration, PV module manufacturers are facing unprecedented market pressure in 2026. According to the "Global PV Market Trends 2026" report released by Enerdata, the industry is transitioning from a high-growth phase into a period of consolidation, with overcapacity, profit compression, and trade barriers becoming the new normal.

Industry Background

Over the past decade, global installed PV capacity has grown from approximately 100 GW to over 1,800 GW by the end of 2025, with China contributing more than 40% of the growth. This explosive growth attracted a massive influx of capital into the manufacturing sector, particularly in China, where capacity expansion for polysilicon, wafers, cells, and modules far outpaced downstream installation demand. According to data from the International Energy Agency (IEA), total global PV module capacity reached approximately 800 GW in 2025, while global new installations that year were only about 450 GW, with capacity utilization below 60%. This supply-demand imbalance drove module prices from around $0.20/W in 2023 to below $0.07/W by the end of 2025, squeezing many companies' gross margins into negative territory.

On the policy front, countries are accelerating their energy transitions. Both the U.S. Inflation Reduction Act (IRA) and the European Union's Green Deal Industrial Plan have designated PV as a strategic industry, while also strengthening localization requirements. For example, the U.S. imposes tariffs on imported crystalline silicon cells and modules and explicitly requires the use of domestically manufactured modules to qualify for full tax credits. Europe supports local factory construction through "PV manufacturing resilience" funding, but remains highly dependent on Chinese imports in the short term. China's dual-carbon targets continue to drive domestic installations, but the explosive growth spurred by policies like the "PV county-wide promotion" initiative has slowed.

Current Developments

Overcapacity Intensifies Industry Consolidation

From 2025 to 2026, global PV module capacity continues to rise. Leading Chinese companies such as LONGi, JinkoSolar, and Trina Solar are still expanding, with LONGi Green Energy's HPBC cell capacity expected to reach 50 GW by the end of 2026, and Jinko's N-type TOPCon capacity exceeding 60 GW. However, large numbers of older P-type PERC production lines face elimination, and small and medium-sized manufacturers lacking cost advantages are forced to exit. According to industry statistics, more than 30 small and medium-sized module companies in China ceased production or closed in 2025, leading to increasing industry concentration.

Accelerated Technology Iteration

PV technology is transitioning comprehensively from P-type to N-type. In 2026, the market share of N-type TOPCon and heterojunction (HJT) is expected to exceed 60%, with TOPCon becoming mainstream due to its cost-performance advantage. Perovskite-crystalline silicon tandem cells are entering the pilot stage, with companies like LONGi and GCL planning to start mass production in 2026-2027, potentially boosting module efficiency to over 28%. Technology iteration further widens the gap between leading companies and lagging manufacturers, with the latter struggling in R&D investment and capacity upgrades.### Trade Barriers Reshaping Supply Chains

The U.S. has resumed anti-dumping investigations on photovoltaic products from four Southeast Asian countries (Cambodia, Malaysia, Thailand, and Vietnam), forcing Chinese manufacturers to set up factories in Indonesia, Laos, the Middle East, or the U.S. itself. Europe imposes carbon tariffs on imported products through the Carbon Border Adjustment Mechanism (CBAM), making carbon emissions from module production a new competitiveness indicator. India continues to implement the ALMM (Approved List of Models and Manufacturers) policy, requiring government projects to use domestically manufactured modules. These policies have fragmented global supply chains, increasing compliance costs and logistical complexity for manufacturers.

Investment Focus Shifts to Downstream Manufacturing

Although module manufacturing yields thin profits, capital remains interested in new technologies and auxiliary materials. In 2025, financing for perovskite startups grew 30% year-on-year, while key auxiliary materials like silver paste and high-barrier encapsulation films attracted tens of billions in investment. Meanwhile, system integration projects combining distributed photovoltaics with energy storage have become new favorites for capital. Module manufacturers such as Jinko Solar and Trina Solar have begun extending downstream into power station development to hedge against manufacturing risks.

Impact on Energy Systems

Further Decline in PV Power Generation Costs

The sharp drop in module prices has directly driven down the levelized cost of electricity (LCOE) for PV power plants. In 2025, the global LCOE for large-scale PV plants has fallen to $0.03–0.04/kWh, and in high-irradiance regions like the Middle East and South America, it is even below $0.01/kWh. This makes solar the cheapest new power source in most parts of the world, accelerating the retirement of coal-fired power.

Increased Pressure on Grid Absorption

Low-priced PV has spurred an explosion in installed capacity, but issues of intermittency and volatility have become more prominent. In 2025, global PV generation accounts for about 6% of total electricity, but in some countries (e.g., Spain, Australia) it has exceeded 20%. Overgeneration during midday hours leads to frequent negative electricity prices, impacting the profitability of traditional baseload power plants. Grids need to deploy significant energy storage capacity. In 2026, global new energy storage installations are expected to reach 120 GWh, with over 60% paired with PV.

Localization of Supply Chains Reshapes Energy Security

Trade barriers push countries to build domestic PV manufacturing capacity, reducing external dependence but also raising the initial costs of the energy transition. Localization policies in the U.S., India, and the EU are shifting the global PV supply chain from a "highly centralized" to a "multi-center" model, which in the long term helps enhance energy system resilience. For example, U.S. domestic module production capacity is expected to reach 40 GW in 2026, meeting more than half of domestic demand.

Challenges Ahead

Insufficient Energy Storage Limits PV Penetration

Although energy storage deployment is accelerating, its growth rate still lags behind PV installations. Seasonal storage needs (e.g., month-to-month power balancing) have not been effectively addressed, and hydrogen storage costs remain high. The IEA predicts that to achieve net-zero emissions by 2050, global energy storage capacity must increase tenfold by 2030, and current investment levels still fall short.

Transmission Grid BottlenecksAreas rich in photovoltaic resources are often far from load centers, such as northwest China, the southwestern United States, and inland Australia. Cross-border transmission corridors require long construction cycles and large investments, and face land use and permitting obstacles. For example, the EU plans to increase cross-border transmission capacity by 50% by 2030, but projects are delayed by an average of 3-5 years.

Project Financing Pressure

Sharp fluctuations in module prices have significantly increased uncertainty in the return models of power station investments. Banks and investors demand higher risk premiums, especially for projects with distant grid connection dates. Rising interest rates have further increased financing costs, and some photovoltaic projects in emerging markets have stalled due to inability to lock in long-term power purchase agreements (PPAs).

Policy Uncertainty

After the U.S. election, the risk of the IRA's survival has caused industry concerns. The implementation details of the EU's CBAM are not yet fully clarified, and disputes over carbon accounting methods continue. After China's feed-in tariff subsidies were phased out, the 'self-generation and self-consumption' model of distributed photovoltaics has been affected by fluctuations in industrial and commercial electricity prices. These policy uncertainties have increased the operational risks for manufacturers and developers.

Future Outlook

Looking from 2026 to 2030, the photovoltaic manufacturing industry will present the following trends:

Capacity Clearance and Pattern Consolidation

It is expected that by 2028, global module production capacity will shrink to 500-600 GW, with excess capacity basically cleared. Surviving companies will form a pattern of 'Chinese leaders + regional champions'. The combined market share of China's top five manufacturers is expected to rise from 45% in 2025 to over 60%, while local manufacturers in Europe and the US will mainly rely on policy orders to survive.

Technological Breakthroughs Drive Next Round of Growth

Perovskite-silicon tandem cells will achieve large-scale mass production in 2027-2028, pushing module costs down by another 20%-30%. Distributed photovoltaic applications such as building-integrated photovoltaics (BIPV) and agrivoltaics will open new markets. Photovoltaic hydrogen production (PV-to-H2) will enter commercial pilot phases in regions such as the Middle East and Australia, providing additional channels for photovoltaic power consumption.

Investment Structure Shifts to Systems and Operations

The investment appeal of pure module manufacturing is declining, and capital is more inclined to flow toward system-level solutions combining 'photovoltaics + energy storage + smart grids'. Areas such as virtual power plants, electricity trading platforms, and digitalization of asset operations and maintenance will receive more investment. According to BloombergNEF (BNEF) forecasts, the share of grids and energy storage in global clean energy investment from 2026-2030 will rise from 30% in 2025 to over 50%.

Reshaping of the Global Energy Landscape

Photovoltaics will become the dominant source of electricity. The IEA expects that by 2030, global cumulative installed photovoltaic capacity will exceed 5,000 GW, accounting for 15%-20% of electricity generation. This will have a disruptive impact on traditional energy giants—oil companies are transforming into integrated energy service providers, and coal power assets are being stranded faster. At the same time, the geopolitical nature of the photovoltaic supply chain is strengthening, as countries regard photovoltaic manufacturing as a strategic industry, and subsidies and trade frictions may persist in the long term.The photovoltaic module manufacturing industry is undergoing a complex evolution from being "scale-driven" to a combination of "technology + cost + globalization." For industry participants, the key to adapting to the new reality lies in: optimizing capacity structure, investing in next-generation technologies, diversifying market deployment, and deeply integrating into the overall transformation of the energy system. This is not only a business competition but also concerns the progress of achieving global carbon neutrality goals.