(Yicai) Aug. 26 -- Five of China’s leading solar panel makers, including Longi Green Energy, reported a combined loss of CNY17.3 billion (USD2.4 billion) for the first half after product prices plunged as a result of oversupply.

Longi was the only one of the five companies to narrow its loss in the six months ended June 30. Its net loss shrank 51 percent to CNY2.6 billion (USD360 million), the Xi'an-based firm’s latest financial report showed on Aug. 23.

Tongwei's six-month loss widened 59 percent to CNY5 billion, while Trina Solar swung CNY2.9 billion into the red after a CNY526 million (USD74 million) profit a year ago, its first loss since going public in 2020. JA Solar Technology's loss almost tripled to CNY2.6 billion, and TCL Zhonghuan's loss climbed 38 percent to CNY4.2 billion. They reported results on the same day as Longi.

The losses stem from sharply lower prices across the solar industry supply chain as a result of excess supply, even as first-half growth in the manufacturing of cells and panels slowed to less than 15 percent and output of polysilicon and wafers actually fell, according to data from the China Photovoltaic Industry Association.

Average prices for the main products in each segment have dropped about 88 percent, 90 percent, 81 percent, and 66 percent, respectively, from their 2020 highs, per the CPIA.

The association's incomplete statistics also show that since the start of last year more than 40 Chinese photovoltaic companies have exited the market, gone bankrupt, or been involved of merger and acquisition deals.

Chinese officials, including from the industry ministry, met with photovoltaic firms on Aug. 19 in a meeting called to stamp out unhealthy competition that is eating into industry profits. Insiders told Yicai that new measures such as tighter project approvals, stricter price monitoring, the phasing out of outdated capacity, and penalties for below-cost sales or misleading marketing, could be finalized within days.

The rapid growth of the renewable energy sector has also outstripped demand in some markets, leading to grid absorption bottlenecks, subsidy rollbacks, and low electricity power prices. Policy risks and uncertainties around regulatory changes have also emerged as key concerns highlighted by several firms.

For example, JA Solar flagged uncertainties arising from potential reforms in renewable energy feed-in tariffs in its earnings report, while Trina Solar warned that if the imbalance between supply and demand worsens in the second half, it could lead to continued volatility or a further drop in its operating performance.

Editor: Martin Kadiev