S&P Global: China's 900 GW of cell capacity meets 590 GW of demand

Serguey Asael Shinder09 October 2026, 07:472 min read

The solar supply chain will stay oversupplied for the next 12 to 24 months, with prices diverging by region rather than recovering together, according to Edurne Zoco, head of technologies and supply chains at S&P Global Energy, in an interview published by pv magazine on 8 October. The figures and forecasts below are hers.

The arithmetic. China alone has more than 900 GW of annual cell production capacity, against global demand of about 590 GW, so capacity will leave the market only gradually. Margins at leading module makers fell from about 9% in 2023 to negative in 2025; Zoco says current prices are not sustainable for most manufacturers, which is why many are diversifying into other components, services and software.

Different segments, different stages. Modules are furthest into the squeeze. Inverters see shipments growing while revenue stays flat; nine of the top ten suppliers are Chinese, and Zoco calls the main risk there regulatory and political rather than technical — citing the US FCC restriction on new foreign-made inverter models and the EU's removal of funding eligibility for inverters from "high-risk" suppliers. Batteries are earlier in the cycle and still profitable; she says headline overcapacity figures overstate the problem, because leading producers run near full capacity and mainstream 314 Ah storage cells have been tight since the second half of 2025.

The technology deadline. China's new efficiency standards, effective January 2027, effectively phase out PERC cells and push production to TOPCon, back-contact and newer designs; perovskite and tandem technologies are exempt from China's consumption tax through 2028. Zoco warns this raises the risk that existing stock becomes obsolete and that non-compliant modules are sold cheaply before the deadline — a particular concern in Europe, where excess inventory is still delaying a market reset.

What it means for buyers. Her advice is to look past price to technology roadmaps, warranties, traceability and the supplier's financial strength, and, for inverters, to localisation plans and exposure to protected markets. For utility-scale projects she flags grid-forming capability as becoming a must-have. The broader shift she describes is from "cost-first" to "resilience-first" procurement: access to protected markets now matters as much as production cost.

Source: pv magazine, "Global PV oversupply accelerates consolidation, regional price divergence", 8 October 2026 — https://www.pv-magazine.com/2026/10/08/global-pv-oversupply-accelerates-consolidation-regional-price-divergence/