China’s solar industry is losing money. The country is doubling down anyway.

China makes far more solar panels than the world buys right now, roughly twice global demand, and the country's solar manufacturers just posted a combined $1.5 billion loss in the first quarter of 2026, part of three years of losses. Companies have been slashing prices to compete with each other, and even with those losses, Chinese officials are choosing not to cut back production. Instead, the government's latest five-year plan calls for upgrading solar factories to make more advanced products rather than shrinking the industry.

For homeowners, this mostly means one thing: cheap solar panels are likely to keep flowing for years. Solar panels and components made in China have kept prices low worldwide, which is part of why solar recently generated more U.S. electricity than coal for the first time on record, in May. Prices aren't expected to jump anytime soon, since analysts say China's oversupply problem isn't going away and officials seem more focused on advancing the industry than fixing the imbalance.

That said, U.S. solar policy is a separate story. Federal tax credits from the 2022 Inflation Reduction Act have been scaled back under the current administration, and solar development on federal land faces new hurdles. Even so, demand for cheap panels has kept the U.S. market growing, since American manufacturers still can't meet domestic demand on their own and rely heavily on components from China. For now, the practical upshot for anyone considering rooftop solar is that panel costs themselves are unlikely to rise because of manufacturing shortages.