China is the world's largest producer and consumer of photovoltaic (PV) products and has made significant strides in the past two decades. Over this time, China's solar industry has experienced ups and downs, influenced by the country's deeper integration into the global supply chain and the ongoing U.S.-China trade tensions.
Author：Botao Xu
Intern：Feifan Zhou
Despite numerous technological barriers and challenges posed by Western technological blockades, China's solar industry has forged ahead, reconstructing the entire PV value chain, from raw materials and PV cells to systems research, development, and production.
However, as China’s PV industry reaches its peak and dominates the global market, many leading companies are contemplating their next steps. Against the backdrop of U.S.-China decoupling and de-globalization, relying solely on manufacturing and exporting poses risks to the long-term development of the industry. Establishing a presence in overseas markets and exploring localized operations has become a priority for many top solar companies.
"Successful international expansion of companies stems from a keen grasp of market trends."
— Das Solar(一道新能源) interviewee
From the early development stage characterized by "three main dependencies abroad" to its deep integration into global mainstream markets, China’s solar industry has steadily risen over the past 20 years, driven by waves of companies that have reshaped the global PV supply chain. Today, Chinese solar companies operate in more than 100 countries and regions worldwide. Despite facing multiple attempts to block their access to international markets, these companies have consistently found new avenues for growth.
At present, the global solar export market is shifting toward emerging regions such as Vietnam, Ukraine, Mexico, and Pakistan, with the solar sector flourishing worldwide. In contrast, the solar industries in Europe and the U.S. have faced a series of challenges. Despite increased governmental support and policy guidance, these regions struggle with high costs, a lack of economies of scale, and slower technological innovation, weakening their competitiveness in the global market.
However, the solar industry also faces significant challenges in recent years. Let’s take a look at the following data:
In the first half of 2024, China's solar product exports totaled USD 18.73 billion, a 35.2% year-on-year decline. Among these, solar wafer exports amounted to USD 1.09 billion, down 59.3% year-on-year, with export volume reaching 2.74 billion wafers, a decrease of 18.2%. Solar cell exports were valued at USD 1.32 billion, a 47.6% drop, though the export volume surged to 27.9 GW, up 38.7% year-on-year. Solar module exports totaled USD 16.32 billion, a 31.1% decline, while export volume grew to 146.5 GW, an increase of 33.7%.
In the first half of 2024, solar cell and module exports continued the 2023 trend of "volume growth, price decline."
Challenges of Solar Expansion Overseas: Dual Pressures of Industry Downturn and Localization
In response to the current downward trend in the solar industry, EqualOcean, after interviewing relevant solar companies, has summarized the following industry pain points:
The overall downturn in the solar industry is particularly reflected in several key challenges, especially in product selection, labor costs, and logistics. First, in the export process of solar modules, managing logistics costs and delivery timelines presents a significant hurdle. This issue becomes even more pronounced once products reach overseas markets, where companies face a shortage of local labor and extremely high costs. Installation costs, in some cases, can even double the cost of the modules themselves, making the total installation costs for solar systems unattractive in certain markets.
Additionally, the widespread use of glass is seen as a market with great potential. Many companies have observed that, although glass is commonly used in solar modules, its power generation potential is often underestimated. Applying glass on rooftops not only improves the sustainability of buildings but also optimizes roof space for power generation, providing greater energy efficiency for businesses.
When expanding into overseas markets, the current demand is focused on finding the right media platforms to more accurately target potential customers. Companies are actively seeking opportunities to participate in industry forums, leveraging their influence as guest speakers to promote their brands. This not only enhances brand visibility but also builds communication bridges with local market customers, driving business growth.
However, the major obstacle in this process is the high labor costs, particularly in foreign markets, where these costs can reach two to three times the cost of the solar modules. Additionally, finding effective events and media channels for promotion in these local markets remains a significant challenge. As market competition intensifies, companies must adopt more flexible and innovative strategies to overcome these bottlenecks and maintain their competitiveness in the global market.
Globalization is Localization: A Breakdown of Brand Globalization (Learning from Das Solar’s Experience)
The solar industry is currently facing challenges as a technology-intensive and highly specialized sector, where brand building has become a key strategy for companies to enhance competitiveness. With intensified market competition, overcapacity in mid-to-low-end production, and continued price drops, the importance of innovation, differentiation, and brand development is increasingly evident. Solar companies are strengthening their competitive advantages by constructing a comprehensive ecosystem encompassing production, manufacturing, branding, and services, positioning themselves as industry leaders.
How can companies survive and thrive amidst the downturn of the solar industry? EqualOcean has explored this question through a series of interviews and research insights. Based on discussions with Das Solar(一道新能源), EqualOcean believes that brand localization may be a crucial path for Chinese solar companies to mitigate risks and establish a solid foothold in their overseas expansion efforts. A localized brand strategy is essential when entering foreign markets, especially as global competition intensifies. Aligning brand positioning with local market values and ensuring a consistent yet culturally relevant brand image and message are critical to success. As more Chinese solar companies expand their international presence, the ability to adapt to different regional cultures, consumer preferences, and market demands becomes the key to success.
Take Das Solar’s experience, for example. The company initially relied on distribution partners to sell its products in multiple international markets. However, as their business grew, Das Solar gradually realized that its original brand image was too "Chinese" and visually unattractive, with an unclear brand positioning in global markets. This made it difficult to compete with local companies, particularly in key target markets such as Europe. As a result, Das Solar decided to undergo a complete brand overhaul.
The first step in brand rebranding is to deeply understand the cultural context and consumer trends of the target market. Through consumer research conducted by EqualOcean analysts in Europe, it was found that solar industry consumers in Europe, especially in countries like Germany and Italy, highly value "family" and "sustainability." Many European households, particularly in these regions, tend to choose products that offer long-term, stable, and sustainable energy solutions for their homes. For the solar industry, designing a brand story around “family” and “sustainability” presents a promising direction.
In addition to visual adjustments and aligning brand values, a globally unified website structure with customized product displays tailored to different markets can be effective. For example, promoting products for small households in Germany, while focusing on solutions suitable for commercial use in Italy, allows companies to maintain brand consistency while meeting the specific needs of each market.
However, rebranding is not just about design and visuals; it also involves preliminary brand research and internal coordination. Many Chinese companies face disagreements between leadership and marketing teams during their overseas expansion. Leaders in traditional manufacturing often do not fully recognize the necessity of brand localization or understand how technology can enhance brand image and user experience. Therefore, marketing and brand teams must engage in ongoing communication and negotiation with leadership to gain approval for brand strategy adjustments. Only through this process can Chinese companies ensure smooth progress in their rebranding efforts.
Following brand repositioning, solar companies need to gradually increase their international market influence through a series of marketing activities. In addition to participating in large international exhibitions such as Intersolar in Munich, companies should actively engage in local exhibitions and sponsorships to deepen their connection with local markets. Since media exposure strategies in Europe and the U.S. differ from those in China, initial promotion of a new brand positioning does not necessarily require heavy media coverage. Instead, consistent market activities and trade show exposure can help build market recognition and acceptance.
When shaping brand content, the "hero's journey" model can be used to construct a compelling brand story that resonates emotionally with consumers. Nike, for instance, often focuses on the struggles and triumphs of athletes, depicting their challenges and growth. By telling the stories of athletes, Nike associates its brand with heroism and the pursuit of excellence. Similarly, solar companies can tell stories about their founding journey, technological innovations, and commitment to sustainability, fostering an emotional connection with consumers through genuine and inspiring narratives.
In brand communication, adapting to local culture and user habits is crucial. Clear, concise language, clean visual design, and an eco-friendly brand ethos will enhance brand acceptance in Western markets. Das Solar’s English name was specifically localized for the German market: “Das Solar,” meaning "the sun" in German, aims to align its products with the quality associated with German manufacturing. According to a Das Solar interviewee, this approach not only reflects respect for the target market but also demonstrates the brand’s global vision.
Of course, consistency is key to building consumer trust. From employee attitudes to user perceptions, companies must maintain consistent brand messaging and image. Training employees to understand and communicate the core brand values ensures a consistent brand experience. Whether in sales, customer service, or marketing, all touchpoints should reflect the brand’s promises and values, so that every consumer interaction reinforces the brand’s professionalism and reliability.
Finally, modern consumers use multiple platforms to obtain information, so a multi-channel brand communication strategy is essential for increasing brand exposure. By leveraging platforms like TikTok, websites, and Instagram, companies can tailor content strategies to reach different audience segments. Sharing brand stories, user experiences, and sustainability practices on these platforms not only attracts more attention but also fosters engagement with consumers. Through diverse communication methods, companies can more flexibly adapt to market changes while establishing deeper connections with potential customers.
For Chinese solar companies, brand rebranding is not just a tool for market expansion but a necessary step for long-term success in the global market. By reshaping their brand image, companies can better meet the needs of different countries, increase product value and competitiveness, and ultimately secure a stronger position in the global clean energy market.
Exploring ESG: Solar Companies Can Learn from Other Industries
Implementing ESG (Environmental, Social, and Governance) principles holds even greater significance for solar companies than for other sectors. As key drivers of clean energy, solar companies not only help mitigate global climate change but also optimize resource use and reduce carbon emissions through sustainable strategies, fostering a global shift towards a green economy. In their international business expansion, strong ESG performance is crucial for gaining trust and competitiveness in the global market, as more investors and consumers focus on corporate social responsibility.
To better achieve these goals, solar companies can learn from the successful ESG practices of other Chinese companies expanding abroad. For instance, enhancing compliance management, contributing to local community development, and forming deep collaborations with global partners are strategies that can increase global influence. The success stories of companies like United Imaging Healthcare(联影医疗) in global healthcare projects highlight how Chinese enterprises can drive international sustainable development through innovative technology and responsible business practices, providing tangible benefits to local communities. These lessons offer valuable insights for solar companies looking to enhance their ESG practices.
Chinese companies have made significant contributions to promoting global sustainability, particularly in improving global healthcare. Take United Imaging Healthcare as an example. The company has helped address the shortage of medical resources in one of the world’s poorest countries, Malawi, with its advanced healthcare technology.
Malawi, recognized by the United Nations as one of the poorest countries, has long struggled with infectious diseases and a lack of medical resources. Rural areas, in particular, face outdated healthcare infrastructure, with diseases like tuberculosis and malaria threatening public health. The problem is worsened by poor transportation, forcing many patients to walk dozens of kilometers for treatment.
In 2022, with the support of the World Bank, Malawi launched a global tender to find partners for high-end medical equipment. United Imaging Healthcare won the contract for two consecutive years, thanks to its leading technology and high-quality products. Its advanced imaging equipment now serves not only Malawi’s major cities but also extends to remote regions, enabling more residents to access quality healthcare. The first batch of 21 devices has been successfully installed in 21 hospitals. A Malawian health official expressed his amazement, saying, "This is the first time we have introduced such a large number of advanced digital medical devices."
One of the hospitals benefiting from the initiative is Queen Elizabeth Central Hospital in Blantyre, Malawi’s largest public hospital. For years, the hospital struggled with outdated equipment and inefficient diagnostic procedures. Dr. Mubisa, the head of the hospital's radiology department, who had experienced the hardships of seeking medical care firsthand, was determined to improve healthcare conditions in his hometown. With the installation of United Imaging Healthcare's AI-powered smart X-ray equipment, uDR596i, the hospital’s diagnostic efficiency has dramatically improved. The time for a single examination has been reduced to just two minutes, increasing diagnostic efficiency fourfold while offering more accurate results. The digital capabilities of the equipment have also streamlined the process for patients to obtain their test results, enhancing the hospital’s overall service quality.
To ensure the project’s success, United Imaging Healthcare’s team stationed themselves in Malawi for over six months, overseeing equipment transportation, installation, maintenance, and local staff training. Malawian engineers expressed deep gratitude for the technical support provided by the United Imaging Healthcare team and expressed their hope for continued collaboration to elevate Malawi’s overall medical standards. This reflects the importance of co-development with local communities as Chinese companies expand globally. By establishing a local presence and providing ongoing support and training, companies can not only elevate the local industry but also win widespread recognition from society and consumers. This model of growing together with local communities lays a solid foundation for long-term cooperation in the future.
Global Solar Industry: New Opportunities Still Abound
Despite the downward pressure on the global solar industry, opportunities continue to emerge. The United States and the Middle East may represent key new investment markets that solar companies expanding internationally should focus on.
Loosening Trade Restrictions: A U.S. Necessity
In August 2022, the Biden administration signed the Inflation Reduction Act (IRA), aiming to reduce the federal deficit through tax reforms and invest around USD 370 billion in climate and clean energy sectors, including subsidies for the solar industry. The U.S. government offers two primary subsidies through the IRA: the Investment Tax Credit (48C ITC) and the Manufacturing Production Tax Credit (45X MPTC). This has created major incentives for solar companies to build factories in the U.S., attracting businesses from China, Europe, Canada, India, and other regions to the American market.
China holds the top global position in solar manufacturing capabilities. However, due to trade barriers, Chinese solar modules have encountered obstacles in entering the U.S. market in recent years, impacting the progress of American solar projects. White House officials have acknowledged that the U.S., in response to the urgent need for renewable energy, has begun allowing imports of solar modules from China.
For China’s solar industry, the U.S. market is a critical strategic area. On one hand, demand for solar energy in the U.S. is expected to continue growing. Guotai Junan Securities predicts that new U.S. solar installations will reach 45 GW in 2024, with an anticipated growth rate of 40%. On the other hand, the higher profit margins in the U.S. market are highly appealing. According to InfoLink Consulting’s data from July 31, 2024, prices for 182mm and 210mm monocrystalline PERC modules and monocrystalline TopCon modules in the U.S. remain at USD 0.25/W (around 1.80 CNY/W) and USD 0.30/W (around 2.17 CNY/W), respectively, while domestic module prices have already fallen below 1 CNY/W.
Even with trade barriers in place, Chinese solar companies continue to hold significant market share in the U.S. According to data from Berkeley Lab, the top three companies in the U.S. module industry in 2021 accounted for roughly 45% of the market. First Solar, LONGi Green Energy, and JinkoSolar were the top three, with market shares of 23%, 11%, and 11%, respectively. In 2022, this figure rose to 48%, as policy barriers strengthened the leading companies' advantages. First Solar, Canadian Solar, and JA Solar were the top three.
Middle Eastern Deserts: More Than Just Oil
After direct exports of solar products from China to the U.S. were blocked, Chinese solar companies quickly turned Southeast Asia into a “transit hub.” However, in June 2024, the U.S. International Trade Commission (USITC) ruled that solar products from four Southeast Asian countries were subject to anti-dumping and countervailing duty investigations, confirming damage. These measures signal new obstacles for Chinese solar companies using Southeast Asian countries as intermediaries to export to the U.S.
With Southeast Asia’s capacity constrained, Chinese solar companies rapidly adjusted their overseas strategies, refocusing on the Middle East market. In July 2024, leading solar companies such as JinkoSolar, Sungrow, TCL Zhonghuan, and Jinli Group announced major orders or joint investment agreements in Saudi Arabia. Prior to this, companies like GCL-Poly, Arctech Solar, and Trina Solar had also established partnerships with Middle Eastern countries, expressing interest in building local factories.
While Middle Eastern countries possess abundant oil resources that generate massive economic benefits, this overreliance on oil has hindered the development of other sectors. As geopolitical tensions rise and the global shift towards clean and low-carbon energy accelerates, the oil-dependent economies of Middle Eastern countries face challenges. According to McKinsey, considering changes in global energy markets and demographics, Middle Eastern nations can no longer rely on oil revenues and public investment to sustain economic growth in the long term.
Most Middle Eastern countries have recognized the structural issues mentioned above and are actively developing their renewable energy industries. Saudi Arabia's "Vision 2030" plan indicates that by 2030, renewable energy is expected to account for 50% of the country's energy structure.
The Middle East is not just a desert rich in fossil fuels. It is one of the sunniest regions in the world, with nearly all Middle Eastern countries enjoying high solar radiation levels. This provides excellent foundational conditions for the development of solar-based renewable energy, making photovoltaics the optimal choice for these nations.
The Middle Eastern market offers not only actual demand but also a more sustainable opportunity compared to Southeast Asia, which has often been seen merely as an export hub. JinkoSolar's Vice President, Qian Jing, stated in an interview with the 21st Century Business Herald that their earlier manufacturing setups in Southeast Asia were largely reactive, primarily aimed at entering the U.S. market. Now, Jinko’s "Global Manufacturing 2.0" strategy focuses on serving local markets and the surrounding regions, particularly supplying to Saudi Arabia and other Middle Eastern markets.
The opportunities in the Middle Eastern market, especially in Saudi Arabia, are evident. Driven by the "Vision 2030" initiative, the market space for solar projects is rapidly expanding. According to InfoLink Consulting, the scale of the Saudi solar market is expected to reach 22 GW to 23 GW in 2023 and is projected to grow to 39 GW by 2024. With advantages in cost, technology, and supply chains, Chinese solar companies are becoming crucial partners in this rapidly expanding market.
The success of Chinese enterprises going global is closely tied to localization strategies that promote mutual development with local communities. By providing long-term technical support and training local talent, companies can not only assist in the advancement of local industries but also deepen their connections with communities and consumers. This model of interdependence and shared growth forms the foundation for gaining widespread recognition in the local society. Especially in a highly competitive global market, only through collaborative development with local markets can companies truly drive the transformation and upgrade of their brand from "Made in China" to "Global Brand."
In the localization process, photovoltaic enterprises must fully understand the cultural background, consumption habits, and values of their target markets. For example, in the European market, consumers place great importance on elements such as "sustainability" and "family." Through research, companies can shape brand stories that resonate with local culture, thereby enhancing market acceptance of their products.
As photovoltaic companies expand internationally, they need to rethink their brand positioning, upgrading their brand from "Made in China" to "Global Brand." This can be communicated through updates in visual design and the use of localized names. For instance, Das Solar has enhanced its appeal and competitiveness in the European market through brand transformation. Photovoltaic companies can learn from these cases to build a brand image that aligns with global markets.
Whether in the photovoltaic industry or other sectors, Chinese businesses should embrace the idea that globalization equals localization. In the global market, the key to success lies in how effectively a company can adapt to and integrate with local cultures, economies, and consumer demands. As globalization continues to evolve, companies must not only focus on overall international market strategies but also shift their perspective towards the unique characteristics of specific regions. Globalization and localization are not opposing forces; rather, they are complementary strategic directions.