2026 may be a critical year for the solar industry's "anti-involution" campaign. In 2025, while the photovoltaic manufacturing sector was at a cyclical low, "anti-involution" emerged as the core consensus and path to transformation for the entire industry. Prices across the main photovoltaic industry chain gradually bottomed out and even improved in the second half of 2025. Industry-wide self-disciplined production cuts helped stabilize and push up prices for segments like polysilicon and wafers. Listed companies in the main industry chain actively pursued self-rescue, widely implementing cost reduction and efficiency improvements, and managed to reduce losses in the third quarter. Driven by policy direction and corporate self-rescue efforts, the results of the photovoltaic "anti-involution" campaign are gradually becoming visible. The industry is moving away from competition based solely on installed capacity and entering a stage that emphasizes technological and quality-based value competition. However, price recovery is only the first step in the industry's repair. The foundation for the industrial chain's recovery remains unstable, end-demand has not fully recovered, and the fundamental issue of overcapacity awaits resolution. The State Administration for Market Regulation recently held a compliance guidance meeting in Hefei, Anhui province, addressing issues and risks related to price violations, indicating the industry is at a critical juncture in its "anti-involution" efforts. The meeting clearly stated that "involution-style" competitive behaviors in the current photovoltaic industry, such as low-quality competition and homogeneous, redundant construction, have led to widespread profitability challenges for companies and distorted market resource allocation. As anti-involution governance enters a deeper phase, 2026 could become a pivotal year for reversing the industry's fortunes, testing the effectiveness of "anti-involution" measures and pushing for substantial capacity rationalization. Industrial chain prices stabilize as "anti-involution" results appear. Since July this year, multi-departmental policy deployments have progressed step by step, with national industry associations and companies collaborating to advance efforts. Policies focusing on controlling capacity, managing prices, and raising standards have been implemented, guiding the photovoltaic industry towards an intensive, high-quality development stage centered on technological innovation. Since the second half of the year, prices for core segments like polysilicon have stabilized and risen, marking initial success for the "anti-involution" actions. The main continuous contract for polysilicon has doubled in price compared to the end of June. The price increase for silicon materials has recently been transmitted to wafers, which experienced the sharpest price hikes in the fourth quarter. On December 25, leading wafer manufacturers collectively implemented significant price increases. According to disclosures from the Silicon Industry Branch of the China Nonferrous Metals Industry Association, as of December 26, prices for various models of monocrystalline silicon wafers were reported at 1.2 yuan/piece to 1.52 yuan/piece. Compared to the price range of 0.86 yuan/piece to 1.19 yuan/piece at the beginning of the third quarter, this represents a recovery of at least about 40%. The average price for polysilicon N-type feeding material was 53,900 yuan/ton, an increase of approximately 54% compared to the price at the end of the second quarter. The Silicon Industry Branch pointed out that supply contraction, recovering demand, and rising costs jointly drove the continued upward trend in wafer prices. Wafer companies persistently implemented production reduction and load-cutting plans, with December output expected to drop about 5% compared to November. Simultaneously, most companies controlled their sales pace, with a noticeably stronger reluctance to sell at low prices, and the phenomenon of dumping at low prices has basically disappeared. Behind the price stabilization in the photovoltaic industry chain lies the combined effect of policy guidance and market self-regulation. Industry analysis suggests that price stabilization is not the endpoint but the starting point for high-quality industry development. The essence of competition in the photovoltaic industry should be a contest of technology and quality, not simply a price war. Ultimately, anti-involution requires building a new ecosystem driven by technology and shared value creation, using cutting-edge technology to shift products from "price wars" to "winning by quality," forming a market mechanism where technology leaders gain premiums and outdated capacity exits orderly. The entire industry urgently needs to complete its transition to high-quality development before the next wave of explosive demand arrives, to be compatible with future needs. Industry self-rescue as "anti-involution" enters a critical period. While policy provides guidance, the market's own screening mechanism is taking effect. The photovoltaic industry is showing divergence: on one side, companies with leading technology and strong cost-control capabilities are gradually restoring profitability; on the other, technologically backward, inefficient enterprises are accelerating their exit from the market. Faced with installation demand that has not fully recovered, photovoltaic companies have upgraded their self-rescue strategies, generally focusing on cost control and improving production efficiency as key management priorities. The period expense ratio for some companies has been effectively controlled, further helping to narrow the loss gap. Leading photovoltaic companies are further intensifying efforts in technological innovation, product upgrades, and supply chain optimization to drive the industry's transition from "price competition" to "value competition." Longi Green Energy Technology Co.,Ltd. (601012.SH) is continuously enhancing its robust operational capabilities by focusing on products and technology, marketing, delivery, and services, while proactively laying out BC technology and channel networks. Tongwei Co.,Ltd. (600438.SH) has further slowed the pace of new capacity construction, shifting instead towards technological upgrades of existing production lines to improve the energy efficiency and purity consistency of silicon material production. Shuangliang Eco-Energy Systems Co.,Ltd. (600481.SH) recently conducted a release and re-pledge of shareholder shares. This move was interpreted by the market as a positive signal, indicating that shareholders have the ability and willingness to actively manage risk and may be raising funds for upcoming industry recovery or consolidation opportunities, reflecting shareholder confidence in the company's long-term value and prudent financial planning. Announcements show that the company's controlling shareholder, Shuangliang Group, and its parties acting in concert, have cumulatively pledged 314 million shares, representing 36.48% of their holdings and 16.76% of the company's total shares. Simultaneously, shareholder Shanghai Tongsheng Yongying Enterprise Management Center (Limited Partnership) released and re-pledged 84 million shares it held on December 25, accounting for 4.48% of the company's total share capital. The effectiveness of self-rescue by photovoltaic manufacturers is already reflected in their income statements. Looking at third-quarter report data, there are signs of improvement in industry profitability. Among 21 listed companies in the main photovoltaic industry chain, 14 achieved quarter-on-quarter growth in net profit attributable to shareholders in the third quarter. Polysilicon leader Xinjiang Daqo New Energy Co.,Ltd. (688303.SH) reported operating revenue of 1.773 billion yuan in the third quarter, a year-on-year increase of 24.75% and a quarter-on-quarter surge of 214.93%. Net profit attributable to shareholders was 73 million yuan, and net profit attributable to shareholders after deducting non-recurring items was 60 million yuan, turning profitable both year-on-year and quarter-on-quarter. Shuangliang Eco-Energy Systems Co.,Ltd. saw its wafer gross margin turn positive in the third quarter, achieving quarterly revenue and net profit of 1.688 billion yuan and 83 million yuan, respectively. Losses for leading companies like Tongwei Co.,Ltd. and Longi Green Energy Technology Co.,Ltd. also narrowed significantly quarter-on-quarter. The primary reason for the narrowing losses among manufacturers was the阶段性 stabilization of industrial chain prices. In the third quarter, the intensity of the industry-wide anti-involution campaign increased, with policies restricting low-price competition. Prices in the main industry chain rebounded and stabilized after falling below the cash cost lines of almost all companies. The毛利率 recovery was most pronounced in upstream segments like polysilicon and wafers due to price increases. It is important to note that, as end-demand has not significantly recovered, a strong sense of博弈 exists between upstream and downstream players in the photovoltaic market. The State Administration for Market Regulation clearly stated that "involution-style" competition has created a "bad money drives out good" effect, suppressing corporate investment in technological innovation. This also implies that 2026 will be a critical period for光伏 "anti-involution" governance and could be a pivotal year for industry consolidation. Particularly noteworthy is that polysilicon, as a key upstream segment of the industry chain, will be the first to pilot capacity integration. An acquisition platform has been established and is expected to play a role in integrating capacity in 2026, aiming to promote capacity rationalization through market-oriented means.
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