China's SAMR targets PV price war as 22 firms post 16.8B yuan loss

China's market regulator will meet solar firms Friday to enforce cost rules after 22 listed companies posted a combined 16.8 billion yuan loss.

China's State Administration for Market Regulation will launch a price compliance campaign for the photovoltaic industry on Friday, enforcing new cost accounting standards after 22 listed solar companies posted a combined estimated loss of 13 billion yuan to 16.8 billion yuan.

"The standard makes it possible to end the chaotic situation where every party made inconsistent claims about cost levels," said Yan Dazhou, Director of the National Engineering Research Center for Silicon-Based Material Preparation Technology.

The T/CPIA 0156-2026 standard, effective July 27, establishes a three-tier cost system — cash cost, production cost and full cost — across the entire silicon-to-module supply chain. It requires vertically integrated enterprises to adopt step-by-step full cost carry-over, prohibiting internal transfer prices below full cost. The guidance comes as module prices have fallen as low as 0.62 yuan per watt in spot markets and 0.66 yuan per watt in centralized procurement, according to industry data.

Without a unified cost benchmark, regulators lacked a quantifiable basis to determine whether bids constituted sales below cost. The new framework gives the China Photovoltaic Industry Association and procurement officials a verifiable tool to reject below-cost bids under the Bidding and Tendering Law, potentially stabilizing margins for manufacturers that have endured 11 consecutive quarters of losses.

Hong Kong-listed solar stocks rose Tuesday in anticipation of the regulatory intervention. Xinyi Solar Holdings Ltd. gained 2.82 percent to HKD 2.19, GCL Technology Holdings Ltd. added 1.69 percent to HKD 0.60, and Flat Glass Group Co. climbed 3.85 percent to HKD 6.74. The Hang Seng Index rose 1.4 percent to 25,674, with turnover at HKD 169.7 billion.

The standard, developed under the guidance of the SAMR and the Ministry of Industry and Information Technology and led by the CPIA, unifies cost calculation scope, coefficients and models across the silicon material, silicon wafer, cell and module segments. It sets three accounting levels — enterprise, single production base and industry — that cross-verify each other. For the first time, vertically integrated producers cannot use internal transfer pricing to artificially suppress downstream costs.

The industry's losses reflect a severe supply-demand imbalance. Song Zhiping, President of the China Association of Publicly Listed Companies, said the core cause is that total supply across the entire industrial chain far exceeds global installed capacity. In the first half of 2026, domestic new photovoltaic installations saw a significant phased decline, affected by insufficient new energy consumption capacity and the high base from last year's installation rush during the same period.

Liu Yiyang, Executive Secretary-General of the CPIA, said the association will seek to establish a photovoltaic industry price supervisor system under the guidance of market regulatory authorities, carrying out price information collection, policy promotion, compliance reminders and risk reporting. Gao Jifan, Chairman of Trina Solar, said the standard gives enterprises the confidence to reject loss-making low-price sales.

The standard alone cannot resolve the structural oversupply that has driven prices below production costs for most manufacturers. But it transforms "sales below cost" from a vague accusation into a quantifiable calculation that can be audited through enterprise MES, ERP and financial book data. For companies that have invested in technology and quality, this provides a long-overdue mechanism to distinguish their bids from competitors who cut corners.

This article is for informational purposes only and does not constitute investment advice.