Price War Intensifies: Module Quotes Approach Cash Cost
Entering the third quarter of 2026, the price war in the Asia-Pacific PV module market intensified. Market monitoring data shows that in early August, the average spot price of monocrystalline PERC modules fell to around $0.12 per watt, with some second- and third-tier manufacturers quoting below $0.11 to recover funds. This price level has hit the cash production cost line for most non-integrated enterprises, squeezing industry profit margins to the limit.
From the upstream supply chain perspective, the continuous decline in polysilicon prices has provided room for module price reductions. In the first half of 2026, global polysilicon production capacity release combined with slowing demand growth caused dense material prices to drop from $8 per kilogram at the beginning of the year to the $6 range. However, the price decline on the module side far exceeded the reduction in silicon material costs, reflecting that end-market competition has broken away from raw material cost logic and entered a brutal phase of market share contention.
Overcapacity Dilemma: New Capacity Far Exceeds Demand Growth
The rapid expansion of PV production capacity in the Asia-Pacific region is the root cause of this round of price declines. According to industry statistics, by mid-2026, global PV module production capacity had exceeded 900 GW, while the expected global new installations for the year were only between 450 GW and 500 GW, resulting in a capacity utilization rate of less than 60%. As the world's largest PV manufacturing base, China accounts for nearly 80% of global capacity, and its capacity clearance process directly impacts the supply-demand balance of the Asia-Pacific and global PV markets.
Notably, Southeast Asia has absorbed significant capacity transfers from Chinese PV enterprises in recent years. The combined module capacity of Vietnam, Malaysia, Thailand, and other countries has exceeded 100 GW. However, the US anti-circumvention investigations and fluctuating tariff policies on PV products from four Southeast Asian countries have put these capacities at risk of export obstruction. Some enterprises have been forced to redirect products to the intra-Asia-Pacific market for absorption, further exacerbating regional oversupply.
Technology Iteration Accelerates: TOPCon and HJT Reshape the Competitive Landscape
Behind the price war, the shift in technology pathways is another force driving industry consolidation. High-efficiency cell technologies represented by TOPCon and heterojunction (HJT) are accelerating their penetration. In the first half of 2026, the market share of TOPCon modules surpassed that of PERC products, becoming the mainstream. This technological iteration puts numerous second-tier manufacturers, still heavily reliant on PERC capacity, at risk of asset impairment, as their older production lines can no longer compete economically with next-generation products.
"Technological upgrades require massive capital investment, yet the current depressed product prices make it difficult for companies to accumulate sufficient profits to support R&D and production line transformation," noted an industry analyst. "This creates a vicious cycle: without technological upgrades, costs cannot be reduced; without cost reduction, profitability is difficult, ultimately leading to elimination from the market." According to statistics, since 2026, over 15 small and medium-sized PV module enterprises have announced production halts or sought restructuring.
Energy Storage Integration Becomes a Breakthrough Direction
Facing profit difficulties in the module segment, more PV companies are turning their attention to the energy storage sector, attempting to enhance added value through integrated "PV + storage" solutions. In the second quarter of 2026, the bidding scale for integrated solar-storage projects in the Asia-Pacific region grew by 65% year-on-year, with the declining cost of energy storage systems making this model increasingly economically viable.
On the policy level, countries such as China, India, and Australia have successively introduced policies encouraging new energy projects to be paired with storage, with some provinces even making a certain proportion of storage configuration a prerequisite for grid connection of new energy projects. This provides a differentiated competitive pathway for PV enterprises with energy storage system integration capabilities and attracts significant cross-sector capital into the energy storage arena.
Industry Outlook: The Consolidation Pain Period Will Last at Least Until 2027
Overall, the capacity clearance in the Asia-Pacific PV module industry is still in its early stages. Multiple research institutions predict that this round of industry consolidation will last at least until the first half of 2027, during which over 30% of excess capacity will be eliminated. For investors, the current phase requires focusing on leading enterprises with technological advantages and ample capital reserves, as these companies are expected to enjoy a dual increase in market share and profit margins after the industry clearance.
From the macro perspective of the energy transition, the continuous decline in PV module prices, while causing pain for the manufacturing side, has significantly reduced the cost of using clean energy. In 2026, the levelized cost of electricity for PV in the Asia-Pacific region has generally fallen below that of fossil fuel power generation, which holds positive significance for promoting regional energy transition and achieving carbon reduction goals. Between short-term pain and long-term benefits, the Asia-Pacific PV industry is undergoing a profound structural transformation.
