Eight Leading Firms Sign 'Anti-Involution Initiative'
On August 6, eight of China’s leading polysilicon producers signed the 'Anti-Involution Initiative' in Shanghai, pledging that all solar photovoltaic (PV) product sales prices will not fall below the full cost calculated according to industry association standards. The signatories include Tongwei Co., Ltd., GCL Technology, Daqo New Energy, Xinte Energy, Asia Silicon (Qinghai), East Hope New Energy (Xinjiang), Qinghai Lihuai Clean Energy, and Xinjiang Gains Energy Technology. Together, these companies account for 90% of China’s total polysilicon production capacity.
The initiative explicitly requires companies to calculate costs based on the 'General Rules for Cost Accounting Models in the Photovoltaic Industry' and ensures that all sales prices, including bidding quotes, do not fall below this standard. If violations are detected, companies must immediately halt and report them to the industry association and the State Administration for Market Regulation. Additionally, companies must proactively accept supervision and inspections from market regulatory authorities at all levels to ensure price compliance.
Market Regulator Steps In to Strengthen Enforcement
On July 31, China’s State Administration for Market Regulation launched a 'price compliance guidance' campaign across the national solar PV industry, requiring companies to adhere to cost-based pricing principles. This guidance is seen as an official endorsement of the initiative, further strengthening the binding force of industry self-discipline. While the regulator did not disclose specific details of the guidance, industry observers believe it will accelerate the elimination of smaller, less efficient producers.
Polysilicon is a critical raw material for solar cells, with China accounting for approximately 80% of global production capacity. In recent years, leading companies such as Tongwei and GCL Technology have continued to expand production, leading to overcapacity and frequent price wars. In 2025, polysilicon prices once dropped below 50 yuan per kilogram, far below the industry’s average cost. The joint action by these eight companies is viewed as an attempt to curb cutthroat competition and stabilize market prices.
U.S. Tariff Policy Adds External Pressure
The U.S. government is expected to impose a 15% tariff on polysilicon derivatives starting in August 2026, while also setting minimum import prices for solar cells and modules. Although the exact implementation date and minimum price standards have not been announced, this policy has become a key driver for China’s polysilicon producers to unite against internal competition. Industry analysts note that if the U.S. tariffs take effect, Chinese companies will face dual pressures in both export and domestic markets, further testing their commitment to price discipline.
China’s solar PV industry has experienced multiple price wars in the past, with companies often breaking self-discipline pledges under market pressure. While this initiative emphasizes 'mutual supervision' and 'government reporting' mechanisms, the lack of clear penalties raises questions about its enforceability. If price discipline measures are strictly implemented, they could drive up global solar supply chain costs, affecting downstream cell and module prices. It remains unclear whether the Chinese government will incorporate this initiative into formal regulatory frameworks or treat it solely as an industry self-regulation measure.
The Photovoltaic Industry Association stated that the joint action by the eight companies will help maintain market order, though its long-term effects remain to be seen. If companies strictly adhere to their commitments, it could alleviate overcapacity issues and enhance the industry’s overall competitiveness. However, against the backdrop of rising global trade protectionism, the challenges facing China’s polysilicon producers should not be underestimated.
