In a striking revelation, Longi Green Energy Technology Co., a leading player in the solar energy sector, has indicated that it may face another year of financial losses in 2025 due to an ongoing decline in the solar supply chain. The company recently announced its projections for the fiscal year ending December, estimating a net loss ranging between six billion yuan (approximately USD 861 million or RM 3.49 billion) and 6.5 billion yuan. This forecast comes on the heels of a reported deficit of 8.6 billion yuan for the previous year, showcasing a troubling trend.
The primary factors contributing to this anticipated loss are the persistently low prices of solar products and rising operational costs. Notably, Longi highlighted a significant surge in the prices of silver and polysilicon during the fourth quarter, which has had an adverse impact on its business operations. Silver, a critical material used in solar cell production, has seen particularly steep price increases, further straining profit margins for companies like Longi.
Despite these challenges, there is a glimmer of hope on the horizon for China's solar power industry. This sector has been grappling with issues of overcapacity and fierce competition, but recent government initiatives aimed at revitalizing various industries could potentially shift investor sentiment positively. Analysts from Bloomberg Intelligence, Chia Chen and Henik Fung, suggest that with the current governmental push to mitigate these issues, an upturn in the solar market may be imminent.
As competition around pricing begins to stabilize due to these governmental efforts, and as solar firms reduce their capital expenditures and consolidate, analysts posit that these changes will lead to a more balanced market with improved prices for solar panels starting in 2026. Longi’s strategy to transition from using silver to more cost-effective base metals in their manufacturing processes by the second quarter is expected to bolster profit margins in the long term as well.
In a related update, Tongwei Co., another leading producer of polysilicon, announced on Sunday that it is likely to incur a net loss between nine billion to ten billion yuan for 2025, compared to a net loss of 7.04 billion yuan the previous year. While the company noted that its polysilicon segment enjoyed operating profits in the latter half of the year due to rising prices, it also acknowledged that escalating costs of essential materials, such as silver, continue to exert considerable pressure on its operations.
This situation raises important questions about the future dynamics of the solar energy market. Will these anticipated shifts truly lead to recovery, or are the challenges too great to overcome? As stakeholders watch closely, it's clear that both Longi and Tongwei are navigating turbulent waters, and the outcomes remain uncertain. What do you think about the potential for recovery in the solar industry? Share your thoughts in the comments!
