Bidding Farewell to "Involution," Photovoltaic Development Calls for "New Standards"

◎Staff Reporter Wang Yuhan

Under the pressure of “involution,” where is the future of the photovoltaic industry? Zhong Baosheng, a National People’s Congress delegate and Chairman and General Manager of Longi Green Energy Technology Co., Ltd., answers: we must rely on “new” forces, guiding the industry out of the quagmire of low-level repetitive competition with higher technological standards.

In the past year, the most significant change in the photovoltaic industry has not been the continued growth in installed capacity, but the overall industry’s dilemma of increasing capacity without increasing revenue or even experiencing widespread losses. According to Zhong Baosheng, this reveals a new issue that must be addressed: the development model driven by scale expansion and profit has come to an end.

“Four years ago, the global installed capacity demand was 130 gigawatts; last year, it reached 530 gigawatts, with a compound annual growth rate of over 40%. This created a development trend where capacity equals profit,” Zhong Baosheng analyzed. “But when the growth rate suddenly drops to around 10%, and homogeneous capacity is severely overbuilt, price competition inevitably occurs.” More worryingly, in order to survive, some companies keep cutting costs, leading to declining product quality, which is eroding China’s hard-won technological leadership in photovoltaics.

How to break this “involution” dilemma? Zhong Baosheng believes that we should rely on market-based “new standards” to make standards a “hard constraint” for survival of the fittest.

This “new standard” should first target the most technologically intensive part—battery cells. Zhong Baosheng suggests establishing a “technology grading and dynamic management mechanism” centered on conversion efficiency. “Instead of debating whether TOPCon or HBC is better, it’s better to use efficiency as a measure to identify who is truly advanced and who is just capacity,” he explained. A market entry threshold can be set to allow competitive advanced capacity, forcing inefficient capacity to upgrade and transform.

This “new standard” also extends to protecting consumer interests. Zhong Baosheng proposes establishing mandatory component standards similar to “energy consumption labels,” making product reliability, safety, and conversion efficiency prerequisites for market entry to safeguard consumer rights. “Low-quality, inefficient products should not disrupt the market with low prices; instead, companies with good, innovative products should be granted market access,” he said.

Finally, companies themselves need a “new standard” to measure operational health. Zhong Baosheng recommends learning from the “three red lines” in the real estate industry to establish a sustainability rating standard for photovoltaic companies, focusing on financial indicators such as debt-to-asset ratio and debt repayment ability, guiding companies to reduce leverage in an orderly manner, and preventing financial risks from the source to create a healthier environment for industry development.

“We should guide resources toward companies with innovative strength and long-term responsibility to customers,” Zhong Baosheng summarized. When the industry shifts from price competition to efficiency and health, and high standards become the common language for market entry, the photovoltaic industry can truly bid farewell to “involution” and embark on a new journey of high-quality development.