China Imposes Mandatory Solar Standards: Goodbye to Cheap Panels

What happened?

China has established three mandatory energy efficiency standards covering the entire photovoltaic supply chain: polysilicon (GB 29447-2026), monocrystalline silicon wafers (GB 47835-2026), and crystalline silicon modules and inverters (GB 47834-2026). These standards, which take effect on January 1, 2027, replace previous voluntary guidelines and set binding limits that will affect production, procurement, imports, and renewable energy projects. According to TechRadar, the rules aim to reduce overcapacity and shift competition from low prices to efficiency. The standards are the first of their kind in China, a country that produces more than 80% of the world's solar panels, and mark a significant regulatory shift after years of voluntary standards that many companies ignored to maximize output.

Why is it important?

The move marks a turning point in the global solar industry. For nearly two years, Chinese manufacturers have been mired in a price war due to overcapacity, driving panel costs to historic lows. However, this strategy has been unsustainable: many companies operate at a loss and quality has suffered. According to data from the China Photovoltaic Industry Association, module production capacity exceeded 700 GW in 2023, while global demand was only 400 GW, creating overcapacity that depressed prices. The new standards force industry consolidation, eliminating the most inefficient production lines and raising the efficiency bar. For international buyers, this means ultra-cheap panels will gradually disappear, but products reaching the market will be more reliable and efficient. This is comparable to what happened in China's steel industry in 2016, when mandatory efficiency and environmental standards eliminated 15% of production capacity, stabilizing the global market.

Consequences for the industry

The standards affect the entire value chain:

• Polysilicon: Older, more energy-intensive plants must upgrade their heat and hydrogen recovery systems or shut down. TechRadar notes that manufacturers will need to adopt improvements in heat recovery, hydrogen recycling, and process optimization. Plants consuming more than 70 kWh/kg of polysilicon (compared to 40-50 kWh/kg for the most efficient) will be under the most pressure.
• Wafers: Obsolete crystal pulling equipment and inefficient lines will be replaced by technologies such as continuous crystal pulling and thinner wafers. Standard GB 47835-2026 requires 182mm wafers to have a thickness below 150 microns, reducing silicon usage and improving efficiency. Lines that cannot meet these energy consumption limits (below 30 kWh per kg of ingot) will become obsolete.
• Modules: Three efficiency grades are introduced, with a minimum of 23.2% for TOPCon and HJT modules, and 23.5% for BC modules. Older PERC modules (typical efficiency 21-22%) and early TOPCon lines will be phased out. According to TechRadar, Grade 1 represents the highest level, and only modules with efficiency above 24% are expected to achieve it. This will force manufacturers to abandon mature technologies like PERC, which still accounts for 40% of global production, accelerating the transition to heterojunction and back-contact technologies.

Manufacturers with modern facilities and low energy consumption, such as Tongwei, LONGi, and JinkoSolar, are expected to benefit, while weaker players, including many mid-sized companies operating with negative margins, will be forced to merge or disappear. State-owned enterprises and public renewable projects will likely prioritize higher-grade modules, accelerating the shift toward premium products. This could reduce module production capacity by 20-30%, according to analyst estimates, similar to the consolidation of China's wind power industry in 2020-2022.

What should readers know?

For consumers and businesses planning to invest in solar energy, the message is clear: extremely low prices will not return. Panel costs, which fell from $0.25/W in 2022 to $0.10/W in 2024, could increase by 10% to 20% as inefficient capacity is eliminated. However, quality and efficiency will improve. Long-term projects will benefit from more durable panels with better performance, featuring annual degradation below 0.5% compared to the current 0.7%. Investors should closely monitor which Chinese manufacturers meet the new standards, as they will be the winners in the next market phase. Additionally, governments in other countries, such as India and the United States, may adopt similar measures to protect their local industries and ensure quality standards. The European Union is already considering minimum efficiency requirements for imported panels, which could align with the new Chinese rules.

“These standards don't just affect China: they will redefine the global solar market, making panels more expensive but improving their reliability and efficiency.” — TheVortiq