China's photovoltaic (PV) industry has set countless "most" records, with three aspects particularly widely discussed in public discourse. First, it's one of the most volatile sectors with dramatic ups and downs; second, it's one of the industries most likely to create billionaires; third, it's an industry most closely tied to the sun. These three facets perfectly illustrate the fierce competition, human ambition, and future ideals.

On the western Sichuan plains, no entrepreneur understands these twists better than Liu Hanyuan. Over 43 years, starting from aquaculture feed to making giant strides into PV, Tongwei Group founded by Liu Hanyuan has become a global leader in aquatic feed, silicon materials, and cells.

Labels like "World's first PV enterprise to enter Fortune Global 500" quickly entered public consciousness. As one of the first private enterprises established after China's reform and opening-up, Tongwei, under Liu Hanyuan's leadership, is weathering the "four ups and downs" industry cycle of the PV sector.

Liu Hanyuan, Deputy to the NPC, Vice Chairman of All-China Federation of Industry and Commerce, and Chairman of the Board of Directors of Tongwei Group

On the evening of April 29, 2025, Tongwei Co., Ltd. released its 2024 annual report. Once dubbed the "PV Profit King," Tongwei was spotlighted alongside industry leaders like TCL Zhonghuan and LONGi Green Energy with their financial reports. People then realized that the current overcapacity in PV might not only be in outdated production capacity but also in the collective overcapacity of high-quality production capacity.

This is indeed the case. In the first quarter of 2025, the gross profit margins of leading companies such as JinkoSolar, LONGi, and JA Solar were all negative, and all significantly declined compared to the same period last year. Notably, only TCL Zhonghuan had a negative gross profit margin last year. Policy calls and self-rescue actions have been continuously implemented.

When South Reviews met Liu Hanyuan in mid-May 2025, he also lamented that this might be the first loss in his more than forty years of entrepreneurship. However, he did not show any worry or fear. Instead, he still revealed his signature confident smile and said rhythmically, "The sounds of the apes on both sides of the river never cease, but the light boat has already passed ten thousand mountains."

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Unyielding amid Storms

Liu Hanyuan often uses the analogy of "stretching a rubber band" to describe the strange phenomenon in the PV industry. Facing the trough of 2025, he still believes, "The mismatch between supply and demand continues to increase, just like everyone is stretching a rubber band together." The rubber band can be stretched longer and longer, but once it exceeds the limit, it will break and rebound, hurting the people stretching it. At worst, it will cause bruising and swelling. Unfortunately, the longer the rubber band is stretched, the fewer people think about letting go.

Since the national "dual carbon" goals were fully launched in 2021, the PV industry has maintained a high level of prosperity, with more than a dozen companies once having a market value of over RMB 100 billion. Under the influence of this capital boom, a large number of "outsiders" also took the opportunity to move. According to incomplete statistics from the industry, in 2022 alone, about 70 listed companies in fields including dairy, toys, jewelry, textiles, special glass, and real estate crossed over into the PV industry.

PV production capacity has increased rapidly with the spread of this sentiment, and the situation has even become so serious that policy intervention is needed for regulation. At the end of 2024, the Ministry of Industry and Information Technology issued the Photovoltaic Manufacturing Industry Normative Conditions (2024 Edition), restricting the disorderly expansion of enterprises and promoting technological upgrades and market clearing.

Since 2021, the PV industry has maintained a high level of prosperity.

Source: Visual China

How serious is the overcapacity? According to data statistics, by the end of 2024, the production capacity of silicon wafers, cells, modules, and other links nationwide far exceeded the demand for new installations in the global market that year, and the capacity utilization rate of many links was even less than 50%.

Li Zhen’guo, the founder of LONGi Green Energy, pointed out in a speech in February 2025 that the production capacity formed by PV in the past two years is 2-3 times that of the previous 20 years. Even if the current market demand has reached several hundred gigawatts per year, the production capacity has already exceeded one thousand gigawatts.

This collective overcapacity situation is not new to PV enterprises. Previously, there were the 2008 financial crisis, the 2012 anti-dumping investigations initiated by Europe and the United States, and the "531 New Deal" in 2018. In each cycle, numerous companies have faced debt, bankruptcy, and failure, leading to significant financial losses for many industry leaders.