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Solar Industry Earnings 2025: Profitability Divide as Storage Leaders Outperform Integrated Manufacturers
Introduction
As 2025 annual reports and earnings guidance continue to roll in, the solar photovoltaic (PV) industry is revealing a striking divergence in financial performance among its largest players. While the sector grapples with widespread losses, energy storage leader Sungrow (阳光电源) has posted record-breaking results—and the contrast with struggling integrated manufacturers could redefine the industry's competitive dynamics.Sungrow Posts Record ¥89.2 Billion Revenue; Storage Business Drives Growth
Sungrow emerged as the sector's standout performer with its 2025 annual report showing total revenue of ¥89.184 billion ($12.3B), a 14.55% year-over-year increase, and net profit attributable to shareholders of ¥13.461 billion ($1.86B), up 21.97% year-over-year—both all-time highs.The company's energy storage systems segment was the primary growth engine:
- Storage revenue: ¥37.287 billion (+49.36% YoY), now 41.81% of total revenue (vs. 32.06% in 2024)
- Total storage shipments: 43 GWh (+54% YoY)
- Overseas storage shipments: 36 GWh (+90% YoY)—the key growth driver
- Storage gross margin: 31.83% (+1.89 percentage points YoY)
GCL Technology also signaled meaningful recovery: net loss narrowed 39.6% to ¥2.868 billion, while gross margin swung from -16.6% to +9.3%—driven by granular polysilicon cash cost falling to ¥25.12/kg (-25.1% YoY).
Losses Pile Up for Integrated Manufacturers
The picture at integrated manufacturers stands in stark contrast.Why the Divide? Three Structural Factors
1. Storage: A High-Growth Standalone Segment
Sungrow's 90% overseas storage shipment growth confirms energy storage is decoupling from PV manufacturing as a distinct, high-margin growth category. Kaiyuan Securities projects global storage market growth of 30–50% in 2026.2. The "Scale Trap" for Integrated Manufacturers
Integrated manufacturers built cost advantages through full-chain scale. But synchronized price declines across polysilicon, wafers, cells, and modules amplify—rather than offset—losses. Tongwei's polysilicon, Longi's wafers, Trina's and Jinko's modules all deteriorated simultaneously.3. Technology Differentiation as a Lifeline
GCL Technology's recovery demonstrates that companies with differentiated technology (granular polysilicon) and a credible cost-reduction roadmap can retain relative advantages even in severe downturns.2026 Outlook: Recovery Expected, but Divergence Persists
- CICC: Leading manufacturers expected to return to profitability in 2026; turnaround investment opportunities emerging
- CITIC Securities: Current rally reflects policy expectations and price stabilization—not a broad earnings recovery wave
- JinkoSolar: Targeting 60%+ high-power product mix in 2026 (1–2 US cent/W premium); storage shipments to double to ~12 GWh
- TCL Zhonghuan: Acquisitions to complete "silicon wafer–cell–module" integration; targeting premium European markets
Structural headwinds that persist: Export tax rebate cancellations, overseas trade barriers, elevated silver prices.
Frequently Asked Questions
Why is Sungrow profitable while other solar companies are losing money?Sungrow's profitability is driven primarily by its energy storage systems business, which operates as a separate, high-growth segment from solar panel manufacturing. Storage demand—particularly in the US and Europe—is growing 30–50% annually, and Sungrow's overseas storage shipments surged 90% in 2025, carrying significantly higher margins than PV modules.
What is causing integrated solar manufacturers to lose money?
Integrated manufacturers suffer from synchronized price declines across all supply chain segments. When the entire value chain faces oversupply, integration amplifies losses rather than providing cost protection. Combined with unexpected raw material cost spikes (silver, polysilicon) in Q4 2025, all major integrated manufacturers posted steep losses.
What is granular polysilicon and why does it matter?
Granular polysilicon is a specialized form produced via fluidized bed reactor (FBR) technology, offering lower energy consumption and higher purity. GCL Technology's granular polysilicon cash cost fell to ¥25.12/kg in 2025—a 25% reduction—enabling gross profit turnaround while competitors remained deep in the red.
Will solar company earnings recover in 2026?
Analysts including CICC and CITIC Securities expect gradual, uneven recovery in 2026. Companies with storage exposure, technology differentiation, and strong global distribution are expected to return to profitability first. Full-sector recovery depends on sustained capacity exit and competitive landscape optimization.
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