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Has the turning point arrived? The logic behind component price hikes and the rush to install is being reshaped.

Against the backdrop of an accelerating global energy transition, the photovoltaic industry is undergoing a profound transformation driven by the interplay of policy, market dynamics, and technological advancements. Following the 2025 Spring Festival, prices for PV modules saw a widespread increase, with leading companies like LONGi Green Energy and Trina Solar taking the lead in adjusting their pricing—rates rose primarily within the range of 0.02 to 0.05 yuan per watt. At the same time, surging market demand has triggered a "rush-to-install" trend. This phenomenon is not a fleeting market fluctuation but rather the result of multiple factors converging, signaling a reshaping of industry dynamics and a potential shift in mid- to long-term development trends.

I. The Logic Behind Price Increases: Resonance of Supply-Demand Mismatch and Cost Pass-Through

Supply-side contraction It is the key driver behind this round of price increases. Starting in October 2024, China's Photovoltaic Industry Association spearheaded efforts to encourage 33 core companies to sign a self-regulatory agreement, strictly curbing the unchecked expansion of production capacity. By January 2025, global module output had dropped by 19.1% compared to the previous quarter, effectively stemming the chaos caused by low-price bidding and significantly boosting market concentration. This industry-wide self-regulation has alleviated the previously severe issue of overcapacity, laying a solid foundation for price recovery.

Cost Pressure Transmission This further reinforces the upward price trend. At the beginning of 2025, silicon material prices surged by 2.22%, driving up the prices of key raw materials such as silicon wafers and photovoltaic glass in tandem. Meanwhile, China's ongoing electricity market reform has pushed up power costs, while adjustments to Europe's export tax rebate policies have added approximately 10%–15% to the cost of exporting modules. The overall rise in costs has forced companies to raise prices in order to maintain healthy profit margins.

II. Rush to Install: Policy Window Drives Surge in Demand

Policy Adjustment It has become the catalyst for a market boom. According to the National Development and Reform Commission's new policy set for 2025, renewable energy projects connected to the grid after June 1 will be subject to market-based electricity pricing, while existing projects can continue to follow the old policy. This "new-versus-old" separation mechanism has prompted developers to accelerate efforts to lock in profits before the policy window closes. Data shows that in January 2025, domestic component bidding volumes exceeded 30 GW, with the average winning bid price rebounding to above 0.692 yuan/watt—up 15% from the end of 2024. Meanwhile, distributed PV projects have seen a surge in regional installation rushes, particularly after April 30 when grid-connection rules changed; in places like Zhejiang, PV panel prices surged by as much as 14% within just one month.

The seasonal recovery in demand in the European market is also injecting momentum into the industry. By early 2025, Europe’s inventory destocking will be completed, and with the traditional peak season arriving in the second quarter, TOPCon module prices have surged past €0.10 per watt, driving the global price benchmark higher. Amid the synchronized boost from both domestic and international demand, the market is currently showing a "double-digit growth" trend—both in volume and price—in the short term.

III. Industry Transformation: A Dual Path of Technological Iteration and Structural Optimization

Behind this round of volatility, the photovoltaic industry is undergoing a profound transformation. Technology Roadmap Competition Entering a critical phase: TOPCon technology has surpassed 70% market share, while companies like LONGi are accelerating their deployment of BC (back-contact) technology. Combined with the TOPCon approach, battery efficiency has now broken through 28%. Meanwhile, HJT technology is achieving cost reductions by cutting silver paste usage by 30%. This technological differentiation is driving significant premium pricing for high-efficiency products—182mm TOPCon modules now command prices as high as 0.72 yuan/watt, representing a 10% premium over conventional products.

Capacity Clearance and Integration Also accelerating in tandem. Although new capacity plans for 2025 still reach 175 GW, small and medium-sized enterprises are rapidly exiting the market due to cost pressures, pushing the CR5 companies' market share beyond 60%. Leading firms are building competitive barriers through vertical integration—such as Tongwei's consolidation of silicon material production capacity—and by pursuing a global expansion strategy, with Southeast Asia now accounting for 30% of their production capacity. As a result, the industry is shifting from a "price war" to a "value-driven competition."

IV. Future Outlook: Short-term Volatility Coexists with Long-term Opportunities

In the short term, the policy-driven rush to install capacity may continue into the second quarter of 2025, with module prices potentially rising another 5%. However, caution is advised, as demand could sharply decline after June, triggering a risk of price corrections. Looking ahead, global carbon neutrality goals will continue to underpin industry growth. According to the International Energy Agency, by 2030, photovoltaic installations are expected to surpass 3,000 GW, while emerging applications such as BIPV and floating PV systems are set to unlock additional growth opportunities.

Facing changing circumstances, businesses need to focus. Technological Innovation and Globalization Capabilities BC technology commercialization and the mass production of perovskite tandem cells—expected to drive down the levelized cost of electricity to as low as 0.15 yuan—will be the key to breaking the current impasse. Meanwhile, to tackle trade barriers from Europe and the U.S., it’s essential to strengthen localized overseas production and certification systems. On the policy front, continuous guidance is needed to ensure a smooth and orderly reduction of excess capacity, preventing another cycle of overproduction from recurring.

The price hikes and installation surges in the photovoltaic industry are, at their core, a process of rebalancing supply and demand under market-driven mechanisms. This phase not only tests companies' strategic resilience but also signals that the industry is shifting from extensive expansion toward high-quality development. Driven by both technological innovation and policy guidance, the PV sector is now poised for a new round of value reevaluation—its trajectory will serve as a microcosm of the global energy transition ahead.

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