{"id":60152632,"date":"2026-09-24T15:47:09","date_gmt":"2026-09-24T14:47:09","guid":{"rendered":"https:\/\/dialogue.earth\/?p=60152632"},"modified":"2026-09-24T15:47:22","modified_gmt":"2026-09-24T14:47:22","slug":"behind-the-layoffs-in-chinas-solar-industry","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/energy\/behind-the-layoffs-in-chinas-solar-industry\/","title":{"rendered":"Behind the layoffs in China\u2019s solar industry"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">In July, China\u2019s solar power generation capacity <a href=\"https:\/\/www.nea.gov.cn\/20260904\/4cd7f6bd4e1f403d830f0c5ee67bb990\/c.html\">surpassed<\/a> coal for the first time. Yet this historic milestone coincided with more than two years of widespread financial losses, layoffs, and incessant controversy surrounding cutthroat competition within the industry.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Data from 2026 interim reports <a href=\"https:\/\/finance.eastmoney.com\/a\/202609043865152265.html\">reveals<\/a> a widespread contraction in revenue across the solar photovoltaic (PV) industry during the first half of the year. In 2025, over 70% of leading companies had <a href=\"https:\/\/www.163.com\/dy\/article\/KRSEJQ0M0511CVT1.html\">fallen<\/a> into the red, and more than 50 firms <a href=\"https:\/\/enterprisewired.com\/chinese-solar-industry\/\">declared<\/a> bankruptcy.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Between 2024 and 2025, China\u2019s top 110 listed PV firms <a href=\"https:\/\/www.toutiao.com\/article\/7636330584277303862\/\">laid off<\/a> 222,800 employees; that excludes many of the small- to medium-sized firms being squeezed out of an overcrowded industry.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The workforce reductions <a href=\"https:\/\/www.pv-magazine.com\/2026\/01\/16\/chinese-pv-industry-brief-major-solar-manufacturers-report-steep-full-year-losses\/\">follow<\/a> two years of net losses for Chinese solar firms, spurred by an industry-wide supply glut that sent module spot prices <a href=\"https:\/\/www.spglobal.com\/energy\/en\/news-research\/latest-news\/electric-power\/011224-world-stuck-in-major-solar-panel-supply-glut-module-prices-plummet-iea?\">plunging<\/a> by over 50%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But the layoffs also reveal how China\u2019s solar industry is remaking itself: by consolidating \u2013&nbsp;through mergers, bankruptcies and capacity retirements; and also by automating production, ending overexpansion and shifting workers from factory floors to sales and advanced products.&nbsp;<\/p>\n\n\n\n<h2 id=\"h-the-hidden-scale-of-layoffs\" class=\"wp-block-heading\">The hidden scale of layoffs<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">China\u2019s PV industry <a href=\"https:\/\/www.irena.org\/-\/media\/Files\/IRENA\/Agency\/Publication\/2024\/Oct\/IRENA_Renewable_energy_and_jobs_2024.pdf\">created<\/a> 4.6 million jobs in 2023, according to the International Renewable Energy Agency. This expansion came to an abrupt end in 2024, when firms <a href=\"https:\/\/finance.sina.com.cn\/cj\/2025-05-23\/doc-inexqhft3821926.shtml\">shed<\/a> 140,000 jobs. Layoffs continued in 2025, with annual reports for China\u2019s top 110 listed firms <a href=\"https:\/\/www.toutiao.com\/article\/7636330584277303862\/\">identifying<\/a> another 68,255 job cuts. Beyond official layoffs, PV firms are embracing a variety of tactics to curb production and \u201c<a href=\"https:\/\/www.toutiao.com\/article\/7636330584277303862\/\">optimise<\/a>\u201d labour costs.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">In December 2025, a solar factory in Anhui <a href=\"https:\/\/www.sohu.com\/a\/964221096_122341795\">issued<\/a> a five-month holiday. Shortly afterwards, the company posted a severance offer for voluntary resignations. Forced production pauses for \u201cholidays\u201d were <a href=\"https:\/\/finance.sina.com.cn\/wm\/2024-12-06\/doc-incypxhf1788067.shtml\">common<\/a> in 2024, but have been getting <a href=\"https:\/\/finance.sina.com.cn\/wm\/2026-03-30\/doc-inhsuquw2705021.shtml\">longer<\/a> in the past year.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Firms are also struggling to pay wages. More than half of firms <a href=\"https:\/\/guangfu.bjx.com.cn\/news\/20260514\/1495632.shtml\">cut<\/a> wages at all levels in 2025, and reports of company-wide salary cuts <a href=\"https:\/\/www.163.com\/dy\/article\/KN4LO7CN0556AKU1.html\">continued<\/a> this year. For factory employees, this often means pay <a href=\"https:\/\/xueqiu.com\/4994716184\/299155019\">drops<\/a> below minimum wage, with ripple effects on local economies.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These tactics are designed to <a href=\"https:\/\/www.sohu.com\/a\/964221096_122341795\">encourage<\/a> voluntary resignations. Coraline Goron of Duke Kunshan University cautioned against interpreting such tactics as purely exploitative, as they are often <a href=\"https:\/\/www.toutiao.com\/article\/7636330584277303862\/\">used<\/a> by firms that can neither afford to pay wages nor lay off staff.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The tactics obscure the true extent of unemployment in China\u2019s solar industry. Some estimates <a href=\"https:\/\/www.toutiao.com\/article\/7502029165105906212\/\">suggest<\/a> de facto layoffs may bring the total to 200,000 job cuts in 2024 alone.&nbsp;<\/p>\n\n\n\n<h2 id=\"h-past-challenges-and-current-crisis\" class=\"wp-block-heading\">Past challenges and current crisis<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">This is not the first oversupply crisis faced by China\u2019s solar industry. As the 2008 financial crisis <a href=\"https:\/\/www.voachinese.com\/a\/china-solar-economy-20130405\/1635341.html?\">reduced<\/a> European demand, local governments <a href=\"https:\/\/news.solarbe.com\/201306\/27\/232687.html?\">expanded<\/a> subsidies for solar firms, creating a glut of exported panels. The EU and the US <a href=\"https:\/\/ec.europa.eu\/commission\/presscorner\/detail\/en\/memo_13_497\">responded<\/a> with anti-dumping duties in 2012, sharply curtailing demand for Chinese solar products as supply was ramping up.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Chinese solar firms faced another shock in 2018. Concerned about looming excess capacity, the central government abruptly <a href=\"https:\/\/www.caixinglobal.com\/2019-01-24\/chinas-solar-panel-makers-dominate-global-exports-101374069.html\">ended<\/a> subsidies for new solar projects in May. Demand for solar modules plummeted overnight, but the downturn proved short-lived, and new policies <a href=\"https:\/\/en.cnesa.org\/latest-news\/2019\/8\/30\/the-development-of-chinas-solar-plus-storage-market-solar-plus-storage-policies\">promoting<\/a> solar over coal power revived the industry in 2019.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">The industry entered another boom in 2020 after Xi Jinping announced national goals to peak carbon emissions and bring them down to zero. Included was a target of 1,200 gigawatts (GW) of installed solar and wind capacity by 2030. This <a href=\"https:\/\/36kr.com\/p\/2553074500509827\">spurred<\/a> a rush of new Chinese solar firms, many <a href=\"https:\/\/qz.com\/93368\/how-chinas-solar-boom-fizzled-and-went-bust\">subsidised<\/a> by local governments hoping to capitalise on a growing industry.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">By 2023, China had 600,000 registered PV firms, with 22.4% <a href=\"https:\/\/news.qq.com\/rain\/a\/20230629A08WVM00\">founded<\/a> in 2022 alone.<\/p>\n\n\n\n<a class=\"wp-block-cd-related-news alignright block--related-news loading\" data-post-id=\"114244\"><div class=\"block--related-news__image\"><\/div><div class=\"block--related-news__content\"><span class=\"block--related-news__heading\">Recommended<\/span><span class=\"block--related-news__title\"><\/span><\/div><\/a>\n\n\n\n<p class=\"wp-block-paragraph\">Solar factories operating at 54% capacity <a href=\"https:\/\/www.ft.com\/content\/debdb94a-822d-4115-b45f-5623d9f9c7a2\">produced<\/a> more modules than markets could absorb by 2024. Global PV production capacity in 2025 <a href=\"https:\/\/www.sohu.com\/a\/964221096_122341795\">exceeded<\/a> 1,100 GW, almost double <a href=\"https:\/\/news.qq.com\/rain\/a\/20251208A05USW00\">global installations<\/a> of 570-630 GW.&nbsp;The excess production capacity <a href=\"https:\/\/news.qq.com\/rain\/a\/20231212A010M800\">sank<\/a> module prices to 1 yuan (about USD 0.14) per watt, below production costs, necessitating the current cuts.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">While such challenges are familiar territory for Chinese solar firms, Wang Bohua, honorary chairman of the China Photovoltaic Association, <a href=\"https:\/\/news.qq.com\/rain\/a\/20251208A05USW00\">warns<\/a> that current losses far exceed any previous cycle.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">For firms losing money on every panel sold, labour cost reductions are a survival tactic, and restructuring is necessary to cut the bloat accumulated during years of unchecked expansion.<\/p>\n\n\n\n<h2 id=\"h-automation-reshapes-the-industry\" class=\"wp-block-heading\">Automation reshapes the industry<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Even as the industry gradually steadies, manufacturing jobs are unlikely to return as automation fundamentally <a href=\"https:\/\/article.cechina.cn\/23\/0724\/11\/20230724113222.htm?\">shifts<\/a> how, or by whom, solar panels are <a href=\"https:\/\/www.moserbaersolar.com\/solar-pv-manufacturing-and-development\/inside-ja-solars-global-manufacturing-network-how-automation-drives-pv-module-production\/\">made<\/a>.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Automated production lines, including fully automated &#8220;<a href=\"https:\/\/news.qq.com\/rain\/a\/20230904A0624G00\">lights-out factories<\/a>&#8221; requiring <a href=\"https:\/\/www.solar-chinaleader.com\/sc-solars-rgv-intelligent-production-line-officially-commences-production\/\">no or few human staff<\/a>, are spreading rapidly across the industry. Solar manufacturing is relatively easy to automate, <a href=\"https:\/\/www.pconline.com.cn\/zhizao\/1877\/18777120.html?\">says<\/a> Cosimo Reis of Trivium China, and companies that do not switch to robotic production lines and AI systems will struggle to compete. As early as 2024, 90% of production at solar giant LONGi\u2019s factory in Jiaxing was <a href=\"https:\/\/finance.eastmoney.com\/a\/202405283088819836.html\">automated<\/a>, a process that only took <a href=\"https:\/\/www.sohu.com\/a\/793563618_120988533?\">nine months<\/a>. Since automation, production cycles at the factory have shortened 84%, while output has increased 35% per hour.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Even if competition eases and prices rise, production line jobs are <a href=\"https:\/\/www.ft.com\/content\/cf427f83-89b2-4912-8f79-0f367ab6e553?utm_source=chatgpt.com\">unlikely to recover<\/a>. The solar industry is shifting toward fewer, more skilled workers overseeing automated systems. The future of China\u2019s renewable energy industry will be high-tech, but not labour-intensive.<\/p>\n\n\n\n<h2 id=\"h-restructuring-and-shift-to-advanced-products\" class=\"wp-block-heading\">Restructuring and shift to advanced products<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Layoff trends show firms are shifting their focus from production to sales, advanced products, and downstream services. Factory floors were hit hardest by the layoffs, with <a href=\"https:\/\/www.gongkong.com\/news\/202507\/443994.html\">75%<\/a> of production jobs impacted. LONGi <a href=\"https:\/\/zhuanlan.zhihu.com\/p\/1911405398835037573\">laid off<\/a> more than half of production staff. Technical and administrative staff were also <a href=\"https:\/\/guangfu.bjx.com.cn\/news\/20260514\/1495632.shtml\">heavily impacted<\/a>, and 2025 saw job losses extend to managerial positions. Sales teams were one of the few areas of continued job growth as companies focused on moving products off shelves.<\/p>\n\n\n\n<div class=\"wp-block-cd-article-image aligncenter block--article-image block--article-image--article\" itemscope itemtype=\"http:\/\/schema.org\/ImageObject\"><div class=\"block--article-image__column\"><div class=\"hide-expand block--article-image__image\"><img class=\"lazy\" data-src=\"https:\/\/dialogue.earth\/content\/uploads\/2026\/09\/A-LONGi-booth-at-a-Africa-solar-expo-in-Kenya_Xie-Jianfei_Xinhua_Alamy_3DM2JMJ.jpg\" data-srcset=\"https:\/\/dialogue.earth\/content\/uploads\/2026\/09\/A-LONGi-booth-at-a-Africa-solar-expo-in-Kenya_Xie-Jianfei_Xinhua_Alamy_3DM2JMJ-768x512.jpg 768w, https:\/\/dialogue.earth\/content\/uploads\/2026\/09\/A-LONGi-booth-at-a-Africa-solar-expo-in-Kenya_Xie-Jianfei_Xinhua_Alamy_3DM2JMJ-1024x683.jpg 1024w, https:\/\/dialogue.earth\/content\/uploads\/2026\/09\/A-LONGi-booth-at-a-Africa-solar-expo-in-Kenya_Xie-Jianfei_Xinhua_Alamy_3DM2JMJ.jpg 2560w\" data-sizes=\"(max-width: 600px) 768px, (max-width: 1024px) 1024px, 2560px\" alt=\"A saleswoman explains solar panel technology to a man at a trade show booth\"\/><\/div><div class=\"block--article-image__content\"><div itemprop=\"caption\" class=\"block--article-image__caption\">A LONGi booth at the Intersolar Africa expo in Nairobi, Kenya (Image: Xie Jianfei\/Xinhua\/Alamy)<\/div><\/div><\/div><meta itemprop=\"contentUrl\" content=\"https:\/\/dialogue.earth\/content\/uploads\/2026\/09\/A-LONGi-booth-at-a-Africa-solar-expo-in-Kenya_Xie-Jianfei_Xinhua_Alamy_3DM2JMJ.jpg\"\/><meta itemprop=\"contentSize\" content=\"2 MB\"\/><meta itemprop=\"height\" content=\"1707\"\/><meta itemprop=\"width\" content=\"2560\"\/><meta itemprop=\"author\"\/><meta itemprop=\"representativeOfPage\" content=\"true\"\/><\/div>\n\n\n\n<p class=\"wp-block-paragraph\">Inverter firms were one of the few areas of <a href=\"https:\/\/guangfu.bjx.com.cn\/news\/20260514\/1495632.shtml\">industry growth<\/a> last year, as demand for energy storage solutions increased. The gap reflects a broader industry shift away from traditional manufacturing toward installing solar systems, <a href=\"https:\/\/www.gongkong.com\/news\/202507\/443994.html\">energy storage projects<\/a> and <a href=\"https:\/\/news.solarbe.com\/202510\/14\/50010146.html\">integrated systems<\/a>. As companies restructure, jobs are <a href=\"https:\/\/news.qq.com\/rain\/a\/20240423A0AEC700\">moving<\/a> from production lines to downstream services.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Firms are continuing to expand production of advanced yet expensive modules and <a href=\"https:\/\/taiyangnews.info\/opinion\/longi-snec-taiyangnews-solar-leadership-conversations-2025\">batteries<\/a>. These production lines require more technical expertise than older modules, and with firms cutting training budgets, only workers with existing skills will find jobs in these factories.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Caroline Goron, of Duke Kunshan University, notes that while local governments are adept at competing for industry and attracting new jobs and revenue to their jurisdictions, their strategies rarely consider how to retain industry and often neglect social policy. Now, as the industry is forced to consolidate, local governments have little to offer the workers losing their jobs.<\/p>\n\n\n\n<h2 id=\"h-what-comes-next\" class=\"wp-block-heading\">What comes next?<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The central government has <a href=\"http:\/\/english.scio.gov.cn\/pressroom\/2026-07\/29\/content_118623282.html\">rejected claims<\/a> that there is overcapacity in the industry, preferring to address the problem of <a href=\"https:\/\/www.scmp.com\/economy\/china-economy\/article\/3291163\/what-neijuan-and-why-it-worrying-chinas-economic-policymakers\">&#8220;involution\u201d (\u5185\u5377<\/a>), meaning excessive competition, and launched <a href=\"https:\/\/dialogue.earth\/en\/digest\/china-to-tackle-overcapacity\/\">campaigns<\/a> to address it. The question is how much the industry will need to consolidate before firms become profitable again.&nbsp;<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Some observers <a href=\"https:\/\/www.reuters.com\/business\/world-at-work\/chinas-solar-giants-quietly-shed-third-their-workforces-last-year-2025-08-01\/\">estimate<\/a> 20-30% capacity reductions are required, but demand shrinkage could increase that figure. \u201cI\u2019m particularly worried about the downstream side,\u201d says Reis. \u201cEven as prices collapsed, demand remained robust for three years, but power market reforms are now upending the entire renewables market.\u201d&nbsp;<\/p>\n\n\n\n<a class=\"wp-block-cd-related-news alignright block--related-news loading\" data-post-id=\"60121332\"><div class=\"block--related-news__image\"><\/div><div class=\"block--related-news__content\"><span class=\"block--related-news__heading\">Recommended<\/span><span class=\"block--related-news__title\"><\/span><\/div><\/a>\n\n\n\n<p class=\"wp-block-paragraph\">China\u2019s <a href=\"https:\/\/www.ndrc.gov.cn\/xxgk\/zcfb\/tz\/202502\/t20250209_1396066.html\">power market reforms<\/a> since 2025 have added greater uncertainty to the market for renewables. Since last July, prices for power from new renewable projects have been determined by a market-based mechanism. Investors in new projects face uncertain returns and are responding with greater caution. This threatens to slow China&#8217;s historic solar installation rate, at least in the short term, making the supply-demand mismatch even harder to resolve.\u00a0<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">&#8220;The best plan I&#8217;ve seen for reducing overcapacity so far is the fund to consolidate and shut down one-third of polysilicon capacity,&#8221; Ries says. The price of polysilicon, a key input material for PV modules also mired in oversupply, began <a href=\"https:\/\/www.pv-magazine.com\/2026\/01\/09\/polysilicon-prices-jump-over-9-as-china-supply-tightens\/\">rising<\/a> in July 2025 after plans were <a href=\"https:\/\/www.reuters.com\/sustainability\/climate-energy\/china-polysilicon-firms-plan-7-billion-fund-shut-third-industry-capacity-2025-07-31\/\">announced<\/a> for a USD 7 billion fund for China\u2019s large producers to acquire and retire one-third of production capacity. It was the first concrete sign of discipline in solar supply chains.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">But the trend was <a href=\"https:\/\/www.news.cn\/energy\/20260115\/a9f19c16b4254fb8aa7979ef478e896a\/c.html\">thrown<\/a> into disarray in January 2026 when the State Administration for Market Regulation accused the fund of anti-competitiveness. It <a href=\"https:\/\/www.pv-magazine.com\/2026\/01\/09\/chinas-competition-regulator-halts-7-billion-polysilicon-consolidation-plan\/\">forbade<\/a> any coordination on \u201cproduction or sales volumes, capacity, pricing, output quotas, profit sharing, market division, or exchange of price and production information.\u201d Despite this ruling, in August, eight polysilicon manufacturers, who account for 90% of China\u2019s polysilicon supply, <a href=\"https:\/\/www.globaltimes.cn\/page\/202608\/1367739.shtml?hl=en-GB\">agreed<\/a> not to sell below the cost of production, coordinating a price floor to tackle \u201cinvolution\u201d.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Analysts have <a href=\"https:\/\/www.sohu.com\/a\/969250752_448994\">anticipated<\/a> the industry will begin stabilising in the second half of this year or next, providing a welcome respite to a beleaguered sector. This will only be possible through brutal consolidations and production cuts that bring supply closer to demand. When the dust settles, China\u2019s solar firms will be leaner, more efficient, and a source of far fewer jobs.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Companies are consolidating, automating production and shifting workers away from factory floors toward sales and advanced products<\/p>\n","protected":false},"author":50001028,"featured_media":60152635,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_has_post_settings":[],"footnotes":""},"categories":[757],"tags":[17073,50041624,580,585,593],"hashtags":[],"country":[20000110],"class_list":["post-60152632","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-energy","tag-energy-transition","tag-labour","tag-policy","tag-renewables","tag-solar","country-china"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v26.0 (Yoast SEO v26.0) - 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