China's solar industry under pressure: price war followed by patent battle

According to media reports, the Chinese solar industry is under severe pressure. The fall in prices is also having an impact on manufacturers there. They are also launching patent lawsuits in order to secure competitive advantages.

Digitimes Asia reports that this price and patent war could reshape the global photovoltaic landscape. The South China Morning Post writes that the share price of solar panel manufacturer Longi Green Energy Technology suffered its biggest weekly loss to date following a profit warning. This was due to expectations of greater losses than previously assumed, a prolonged price war and chronic overproduction in the solar industry. In 2024, the world's largest manufacturer of silicon wafers is expected to lose 1.1 billion US dollars.

Price collapse hits patent lawsuits

A legal portal reports that Jinko Solar filed a lawsuit against Longi at the beginning of the year, demanding that the company immediately cease and desist from patent infringements. The case concerns the "TOPcon" technology for solar panels. The hearing is scheduled for February 13. However, manufacturer Trina Solar has also filed patent lawsuits against Runergy and Canadian Solar in the USA. JA Solar, on the other hand, is proceeding against Astroenergy before the German offices of the Unified Patent Court (UPC).

The patent suits relate to different technologies for increasing efficiency. TOPCon (Tunnel Oxide Passivated Contact, developed by the Fraunhofer Institute for Solar Energy Systems) describes a cell architecture in which the connection contacts of the modules do not come into direct contact with the silicon. This could otherwise lead to a recombination of the charge carriers and thus to a loss of performance, particularly on the back of the module, which can obviously reach relevant levels with the bifacial solar panels that are now common. The "Passivated Emitter Rear Cell" process (PERC, developed by Meyer Burger), which can increase the efficiency of older p-type solar cells to more than 20 percent, is somewhat older. Heterojunction with Intrinsic Thin-layer (HIT) is also relevant for thinner wafers and higher yields. Interdigitated Back Contact (IBC) increases efficiency through contacts on the back of the individual solar cells. Individual PV manufacturers hold patents on parts of these technologies, which they use to take action against competitors in order to strengthen their own position. The patent lawsuits apparently serve to achieve cross-licensing and also to gain access to technologies.

In the recent past, there has been a rapid and massive expansion of the photovoltaic industry in China, with huge production capacities for wafers and solar panels being built up. The huge oversupply is leading to a global drop in prices and is also causing turbulence on the domestic market: Swiss photovoltaic company Meyer Burger, for example, has ceased production in Freiberg, while Solarwatt is also ending production here and realigning the company.

As reported by Yahoo Finance, the China Photovoltaic Industry Association (CPIA) stated in its statistics for 2024 that 39 of the 121 listed national PV manufacturers reported losses. Longi has already laid off five percent of its workforce. There have been a number of insolvencies. In December, 33 of the largest Chinese PV producers signed up to a self-regulation scheme similar to that of OPEC. In it, they agreed production quotas based on their capacities and minimum prices.

(dmk)