China's solar-panel manufacturing sector is expected to balance its excess capacity by 2027, after a projected 7% annual decline in supply from 2024 to 2026. This is in contrast to the 70% growth seen from 2021 to 2023.

To address the oversupply, the Chinese government has implemented regulations to restrict new facility expansions, including increased minimum capital requirements and limitations on energy and water usage. Export tax rebates on solar products have also been reduced from 13% to 9% to facilitate industry consolidation and mitigate trade tensions.

Over 30 major companies in the industry have committed to cutting production, adhering to future production quotas and ceasing aggressive price discounting, in an effort to stabilize the industry and reduce widespread losses.