At the TaiyangNews Webinar on Global Solar Market Developments 2025—H1 Review & H2 Outlook held on July 17, 2025, experts discussed the key trends shaping the solar PV market this year and its future direction.
Moderated by TaiyangNews Managing Director Michael Schmela, the panel featured Rystad Energy Vice President Marius Bakke, Sungrow Europe Head of Market Research Frank Du, and AECEA Director Frank Haugwitz. The discussion covered policy changes, storage economics, and challenges related to pricing and overcapacity.
A recording of the full discussion, on which this transcript is based, is available on TaiyangNews’ YouTube channel.
TaiyangNews: How sustainable is the recent uptick in solar module and silicon prices, and will it trigger lasting impacts across the supply chain, or is it just a temporary fluctuation before prices continue falling?
Marius Bakke: Past patterns show that Chinese announcements to curb overproduction cause temporary price hikes in polysilicon and wafers, but with high inventories and overcapacity, prices typically fall again – often after the Lunar New Year – unless a major market shift occurs.
Frank Haugwitz: Current polysilicon prices are about 45 RMB/kg, with floated figures near 60 RMB/kg – still modest and unlikely to drive lasting change. Seasonal patterns dominate, and even with slight increases, modules remain highly affordable. Any price uptick will likely be short-lived, returning to previous levels.
TaiyangNews: If solar module prices keep falling, how are you preparing for that scenario?
Frank Du: We focus less on short-term pricing and more on long-term sustainability, working closely with partners and suppliers to meet industry requirements. Compliance with future legislation, such as Europe’s carbon footprint and battery regulations, is a key part of our strategy.
TaiyangNews: For inverters, how steep is the cost curve now, and how much potential remains for further cost reductions?
Frank Du: I can’t comment much on the price.
TaiyangNews: Given persistent overcapacity, emerging technologies like tandem perovskites and back contact cells, and efforts to differentiate with high-efficiency products, will these innovations meaningfully change the market dynamics, or will overcapacity continue indefinitely despite the limited financial endurance of companies?
Frank Haugwitz: Innovation is key to staying competitive. Profits are reinvested into R&D, enabling faster product readiness, especially in China, where partnerships and project integration provide valuable field data. They then use this field data to prepare a market-ready product, earlier than anyone else. This environment supports smaller players and drives differentiation through technologies like back contact and perovskites. Most investments focus on upgrading existing fabs rather than building new ones, as upgrades are cheaper and sustain operations for the near term.
TaiyangNews: Given regionalization trends for energy security, with India’s protective policies, US policy shifts, and local companies moving upstream, how do you see diversification efforts progressing toward greater self-sufficiency in different regions?
Marius Bakke: Speaking about the US solar market, the manufacturing growth under the IRA has been skewed toward module assembly due to 45X credits and domestic content adders. However, stricter rules, high project costs, and policy uncertainty make long-term investment risky. Upstream progress in polysilicon, ingots, and wafers is limited, with few fully integrated supply chains. Announcements have slowed, and future demand depends heavily on policy stability and potential trade restrictions.
TaiyangNews: Sungrow operates overseas plants in Thailand and India and has a strong presence in Europe. How are you approaching global manufacturing expansion amid regionalization and Europe’s local sourcing rules under the Net Zero Industry Act (NZIA)?
Frank Du: We operate in the US and other regions, and we’re definitely exploring manufacturing options for Europe. The EU is less restrictive than the US, where rules on Chinese firms are much tougher. That said, we see a growing ‘Made in EU’ sentiment, and local production can help win extra points in public tenders under the Net Zero Industry Act. We want to support our customers in getting those advantages, but I can’t share details yet on timing or the stage we’re at.
TaiyangNews: Looking at global demand over the next 2 to 3 years, including the role of batteries, how quickly can government policies and large-scale storage deployment address negative electricity prices and low capture rates, and could this meaningfully boost solar demand?
Frank Haugwitz: China’s 15th Five-Year Plan will focus heavily on ensuring more sophisticated storage deployment. In the past, projects were required to pair a fixed amount of storage with every solar or wind plant, which wasn’t very smart. Now, the government is exploring smarter approaches, including large air-compressed storage projects of 300–350 MWh – 6 are already under construction. From a developer’s perspective, storage is shifting from being politically mandated to economically driven, which could spark a renaissance. I’m optimistic about China’s storage outlook, with the focus moving from blanket requirements to targeted, diversified solutions.
Earlier this year, I expected around 10% growth, but with 200 GW installed by May and more in the pipeline, I’m still positive for this year. Next year, however, could be different – we might see a contraction of 20–30%, bringing the market down to around 200 GW. That’s still huge by global standards, but my bigger concern is who will absorb all the surplus production capacity. It will be tough. By 2027, once regulations are fine-tuned to match real market conditions, I’m confident demand will pick up again.
Marius Bakke: Whether in China or elsewhere, storage adoption is going to be driven by market conditions. In the US, almost every solar project in the interconnection queue is paired with storage, and Europe is seeing the same trend. Even owners of existing standalone PV systems in Europe often pay balancing authorities to avoid high balancing costs, which can eat away profits. Storage not only enables merchant market revenues but also shields projects from steep balancing fees. We see the same pattern in Australia, and in China, merchant projects will also need storage – not because it’s mandated, but because the economics demand it. That’s why we’re more bullish on storage than solar compared to many of our peers.
TaiyangNews: With Sungrow supplying over a quarter of last year’s global inverter deployments and being a major storage provider, what do you see as the 3 biggest challenges to scaling PV and storage deployment, and what needs to be fixed to achieve your goals?
Frank Du: For PV, the challenges vary by region. In the US, policy uncertainty and tariffs disrupt supply chains. In China, it’s a different set of issues. In Europe, permitting delays, grid constraints, and weak business cases—especially for storage—are big hurdles. Governments need to fix double taxation on stored energy and create proper market mechanisms so investors see viable returns. Many EU countries still lack clear storage regulations; in early climate plans, only a handful even mentioned it. Stronger national-level support, both in policy and funding, is essential to scale PV and storage.
TaiyangNews: Even though solar and storage technologies are becoming cheaper and more competitive, the sector remains highly dependent on policy decisions. Energy markets everywhere are shaped by government action, and there are still important changes that must be made to unlock greater deployment. Nevertheless, it’s encouraging to see the market continue to grow. While manufacturing faces tough times, companies are working hard and innovating to push the industry forward and reach the next level.
Thank you all for sharing your insights into the market dynamics.
Individual presentations from the 3 speakers, as shared during the webinar, and a conference summary can be accessed here.