China’s Solar Makers Rally as Group Calls for Rational Prices

(Bloomberg) -- Shares of Chinese solar companies rallied after an industry association appealed for rational prices for panels following fierce domestic competition that’s led to losses and bankruptcies.

Bidding prices for panels should not be lower than production costs, which is against the law, according to a statement from the China Photovoltaic Industry Association on Friday. The group will start investigating and publishing solar production costs, and recommended a floor of 0.68 yuan ($0.1) per watt.

Trina Solar Co. jumped as much as 11.4% in Shanghai on Monday, while JA Solar Technology Co. was up as much as 10%. Jinko Solar Co. and Longi Green Energy Technology Co. rose as much as 7.3% and 6.4%, respectively.

China’s world-leading solar makers have suffered huge losses as overcapacity and a price war forced many to sell panels below the cost of production. That’s led to bankruptcies and mergers as smaller players are squeezed.

A price floor may help mitigate the fire sale on panels and accelerate the liquidation of small-scale makers, which could lead to investment sentiment improving, Dennis Ip, an analyst with Daiwa Capital Markets, said in a research note on Monday. However, the glut may not be resolved until the second half of 2025, he added.

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