China’s Embattled Solar Makers Turn to Batteries for Growth

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(Bloomberg) — China’s biggest maker of solar equipment wants to grow its batteries business to a similar size. 

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“We hope that within about five years, the scale of our energy storage business will be comparable to that of our solar business,” Zhong Baoshen, chairman of Longi Green Energy Technology Co., said on an earnings call following the company’s fifth consecutive quarterly net loss.

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After more than two years of financial misery, Chinese solar manufacturers are still racking up the losses despite efforts to speed consolidation and diversify operations. Longi’s peers, including JA Solar Technology Co., Jinko Solar Co., Tongwei Co. and Trina Solar Co., all ended the quarter once again in the red. 

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Demand for large-scale batteries has boomed as renewable energy runs up against the limitations of the sun and wind’s intermittency. But the rapid buildout of capacity has stoked concerns that energy storage could face the same crisis that has beset solar, where overcapacity and cutthroat pricing have crushed earnings.

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The government has already summoned the country’s leading battery makers twice this year to warn them against making the same mistakes that have damaged other renewables industries. (The solar industry, by the by, has been hauled before the authorities at least three times over the same period.)

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Fierce Competition

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Zhong acknowledged that “competition is becoming increasingly fierce” but said leading solar companies have advantages in terms of existing know-how, branding and sales channels. 

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Longi is a latecomer to the sector. Its target this year is to sell 6 gigawatt-hours of battery systems. Trina is ahead, with shipments last year more than doubling to over 8 gigawatt-hours, and over 60% of that coming from overseas markets. 

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In its annual results, Trina said it had more than 12 gigawatt-hours of foreign orders pending at the end of 2025. That momentum is likely to endure as war in the Middle East fans the world’s disavowal of fossil fuels.

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“Looking at the broader trend of the energy transition, the energy storage market will continue to maintain relatively rapid growth, offering opportunities for companies entering this space,” Longi’s Zhong said.

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Zhong also struck a more positive note on efforts to finally clear-out the solar industry’s excess capacity. He said this year should see decisive results, citing both “the implementation of the government’s anti-competition measures,” and “more importantly, market-based solutions.”

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On the Wire

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China’s largest oil and gas company said it would make “every effort” to ensure there are no domestic shortages as Beijing tries to buffer its economy from energy shocks caused by the Iran war.

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Chinese construction activity suffered its biggest slump since the early stages of the Covid pandemic and the services sector fell back into contraction, even as exports kept factories humming despite the disruptions caused by the war in Iran.

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China has removed Han Jun as the most senior Communist Party official at the agriculture ministry, a sudden move that marks the second such reshuffle in under two years.