Chinese polysilicon majors pledge to end loss-making sales

Eight of China's biggest polysilicon producers, including Tongwei, GCL Technology, and Daqo New Energy, have agreed not to sell solar materials below cost. Polysilicon is the raw material used to make the silicon wafers and cells inside solar panels, so these companies sit at the very start of the solar supply chain. Together the eight make up more than 90% of China's polysilicon output, which supplies most of the world's solar panels.

The move follows more than two years of oversupply that pushed prices below what it costs to produce the material, leaving even large manufacturers losing money. Chinese regulators have been pushing the industry to stop this kind of price war, introducing a standardized way to calculate production costs in late July and meeting with manufacturers to demand compliance reviews. A new energy-efficiency rule taking effect in 2027 will also push older, less efficient polysilicon plants to upgrade or shut down.

For homeowners, this is worth watching but not urgent. Years of cheap, oversupplied polysilicon have helped keep solar panel prices low. If Chinese producers succeed in holding prices above cost and shutting down inefficient plants, panel costs could eventually rise instead of continuing to fall. Markets already reacted: shares of the major producers jumped, and polysilicon futures prices rose about 14% since late July. Nothing changes immediately for anyone planning a solar installation, but the era of falling panel prices driven by Chinese oversupply may be leveling off.