Solar Supply Chain Glut to Persist as Technology Shift Reshapes Margins

The global solar supply chain will remain in oversupply for the next 12 to 24 months, with excess manufacturing capacity exiting the market only gradually, Edurne Zoco said in an interview with pv magazine. China’s manufacturing base alone can produce solar cells at a capacity exceeding 900 gigawatts per year, while global demand stands at roughly 590 GW — a structural gap that shows no sign of closing quickly.

Being the lowest-cost producer is no longer sufficient. Access to protected markets has become just as critical to profitability as the cost of manufacturing, as trade barriers, local-content requirements and supply-chain security concerns continue to fragment the industry. Low plant utilisation rates, changes to China’s tax policy and fragmented trade rules compound the pressure further.

A technology transition is accelerating the restructuring. New Chinese efficiency standards set to take effect in January 2027 are phasing out older PERC technology and pushing manufacturers toward TOPCon and next-generation cell designs. That timeline creates a specific risk: stockpiles of cheaper, older-format modules could become technologically obsolete before they are sold, prompting suppliers to move inventory at cut-rate prices ahead of the deadline.

For buyers, the calculus is shifting. Price alone is no longer a sufficient guide; technology roadmaps, product warranties and a supplier’s financial stability have all become relevant factors. Trade barriers are also creating price divergence across markets: where supply is protected or locally produced, a premium is forming for compliant equipment, while commodity markets continue to face persistent downward price pressure.

Source: PV Magazine