The global solar industry is set to face prolonged low pricing throughout most of 2025, according to the latest report from Clean Energy Associates (CEA). Persistent overcapacity in solar panel manufacturing, particularly in China, continues to exert downward pressure on prices despite government intervention.

“Government and industry efforts to date have had limited effectiveness in addressing the supply-demand imbalance,” CEA reports. The organisation adds that “the burden of proof is on MIIT to demonstrate it can meaningfully address these issues.”

China tightens regulations, but impact remains minimal

In late 2024, the Ministry of Industry and Information Technology (MIIT) introduced stricter energy and water use requirements for PV factories. Meanwhile, the China Photovoltaic Industry Association (CPIA) proposed a price floor of CNY 0.680/W (USD 0.094/W, including VAT) for domestic modules.

However, “no meaningful impact was observed on manufacturing capacity plans or Chinese market prices,” CEA notes. Despite more than 30 manufacturers agreeing to voluntary production limits based on market share, sector fragmentation and internal competition have hindered tangible results.

The report also highlights the growing adoption of 210R rectangular wafers, praised for their enhanced efficiency and system compatibility. “Product orders and shipments show the sector is aligning around 210R as the ideal rectangular format,” the document states.

This cell type allows manufacturers and project developers to reduce balance-of-system (BOS) costs through longer string configurations and fewer auxiliary components.

Europe accelerates incentives under the Clean Industrial Deal

In February 2025, the European Commission launched the Clean Industrial Deal, a strategic roadmap to support domestic clean tech manufacturing. Key policy actions include:

• The Affordable Energy Action Plan is aimed at lowering industrial energy costs.

• The creation of an Industrial Decarbonisation Bank, with EUR 100 billion in available funding.

• New procurement criteria emphasising resilience and sustainability by 2026.

“This plan will focus more than ever on clean technology manufacturing,” CEA notes, while also warning that “many of the proposed funding mechanisms remain bound to existing rules.”

Italy simplifies access to tax credits for European modules

In late 2024, Italy amended its Budget Law to enhance the Transizione 5.0 tax credit scheme. Businesses investing in high-efficiency, EU-made modules can now access up to 45% in tax credits, depending on certified energy savings and module performance.

“The module’s efficiency directly affects the value of the tax benefit,” CEA highlights. Investments may also be combined with other fiscal incentives available in special economic zones (ZES) or Free Trade Areas (FTAs).

United States redefines fiscal incentives under 48E/45Y rules

In January 2025, the US Treasury finalised regulations replacing the traditional 48 ITC and 45 PTC incentives with the 48E and 45Y schemes. From this year forward, all new projects must comply with these updated frameworks, which apply tax bonuses at the level of the “qualified facility.”

CEA points out that “the Domestic Content Bonus can no longer be applied as a single credit to hybrid systems,” requiring more precise planning to capture available incentives.

Capacity expansion: the US and India push forward

According to the report, the United States is on track to reach 65 GW in module and 13 GW in cell manufacturing capacity by the end of 2025, with a further 84 GW and 90 GW in various stages of development. However, CEA cautions that “policy uncertainty may slow some of these projects.”

In India, the government has allocated USD 2.9 billion to the Ministry of New and Renewable Energy and extended the Approved List of Models and Manufacturers (ALMM) to include solar cells. Although base customs duties were reduced, additional levies raise the effective import cost to 27.5% for cells and 60% for modules.

IP conflicts intensify across premium markets

The report concludes by highlighting a growing trend of intellectual property (IP) disputes. “Manufacturers are seeking to block competitors in premium markets like the US, Europe, Japan, and Australia through legal challenges,” CEA explains.

Simultaneously, some suppliers are now leveraging Chinese courts to restrict export activities of rivals, reflecting heightened competition within the domestic market for global share.