SNEC ’26: Chinese Solar Producers Push High-Efficiency Modules As Margin Squeeze Deepens

Weak downstream solar demand and intense price competition set a more restrained tone at this year’s SNEC exhibition in Shanghai, where Chinese solar manufacturers placed greater emphasis on high-efficiency modules, technology roadmaps and cost reduction.

The crowd at this year’s exhibition was visibly thinner than in previous years, amid less marketing hype and a focus on product development, as manufacturers grappled with weak margins and a slower domestic market.

The SNEC 19th International Photovoltaic Power Generation and Smart Energy Conference & Exhibition, commonly known as SNEC, was held on June 3-5 at the National Exhibition and Convention Center in Shanghai.

High-efficiency modules dominate discussions

One of the biggest topics at the exhibition was the industry’s shift toward higher-efficiency modules as manufacturers continue to battle weak margins.

Tunnel oxide passivated contact or TOPCon remains the dominant technology in terms of market share, but several incumbent TOPCon manufacturers are now pursuing hybrid technology routes which combine this technology with back-contact or BC architecture. At the same time, a small but fast-growing group of BC-focused manufacturers is looking to challenge TOPCon’s market position.

A technical specialist at a top-10 module manufacturer told OPIS that the shift toward BC technology has been more prominent this year, partly because the industry is looking for ways to reduce silver consumption in the cell and module manufacturing process.

BC technology is generally seen as having the potential to use less silver, and several market participants at SNEC said they expect BC production costs to move closer to TOPCon over time.

Although TOPCon manufacturers are also working to reduce silver usage, this comes with challenges. Manufacturers still need to keep production costs low while ensuring that cell efficiency and reliability can be validated in the market.

Silver prices have eased over the past month, but remain sharply higher than the one year ago. This has kept metallization costs in focus for cell manufacturers and increased the pressure to commercialize lower silver or silver reduction technologies.

TOPCon module manufacturer Jolywood’s Nano Armor Metal Inter-Contact or Namic solar panels, showcased at the exhibition, uses low-silver-content cells by partially substituting silver paste with lower-cost aluminum paste in the metallization process. The company had rolled out production of its Namic-tech TOPCon cells at Taiyuan, Shanxi province, in late May.

“The Namic technology is expected to cut silver usage and reduce production costs. But this is still on paper and we have to see how it performs in the long run,” a Jolywood company source said during the exhibition. The source told OPIS that the company expects to launch BC module production in the first half of 2027.

Buyers weigh efficiency against cost

From the buyers’ perspective, the cost of higher-efficiency modules must still be competitive enough to justify switching away from mainstream TOPCon products. Several buyers said the price gap between BC modules, high-efficiency TOPCon modules and traditional mainstream modules has narrowed, thus making the switch to higher-output modules more attractive from a cost perspective.

In export markets, some industry sources OPIS spoke to during the conference said leading BC manufacturers have been aggressive in pricing as they seek to gain market share. Some BC modules were heard to be offered at prices on par with TOPCon modules, while others were quoted at up to around 5% higher.

Meanwhile, perovskite modules remain far from mainstream commercialization. Market sources said perovskite module prices were heard at around two to three times the cost of mainstream TOPCon modules, while concerns over durability and bankability continue to limit market adoption.

Discussions around heterojunction or HJT and perovskite technologies were relatively quiet at this year’s exhibition. According to industry sources, one major HJT module manufacturer did not appear at this year’s exhibition and was heard to have stopped production to focus on clearing inventories and addressing debt pressure.

A solar project developer told OPIS at the conference that most of its current signed contracts are still based on TOPCon modules, but this may change as the company looks to secure BC modules for pipeline projects due for delivery over the next few years.

“BC modules have not been widely tested by the industry in terms of long-term field performance, but manufacturers have made commitments to meet the promised performance targets,” the module developer source said.

A top-tier manufacturer noted that, from a product lifecycle perspective, commercialized solar technologies typically have a runway of five to seven years. The source added that TOPcon has already been in the market for around that length of time, while BC may have a longer runway ahead.

Another industry source said BC technology could see further room for efficiency gains. The current generation of BC modules uses half-cut cells, while the next generation is expected to follow the path of TOPCon modules through the introduction of multi-cut cells to raise power output and efficiency, the source said.

BC adoption faces IP and scale-up hurdles

However, the outlook for BC is not all rosy. A broad consensus among industry participants is that intellectual property risks could make it difficult for BC manufacturers to scale meaningfully in export markets.

The manufacturing process for BC modules also involves more processing steps than other technologies like TOPCon and HJT, making it more capital-intensive. This creates a higher barrier to entry at a time when many solar manufacturers are already struggling with weak or negative margins.

As a result, many industry participants told OPIS that they expect the scale-up of BC capacity to be slower than the rapid uptake previously seen with TOPCon or Mono PERC technologies. This could also mean that BC module sales in the export market may remain concentrated among only a few leading players.

Downstream price pressure persists despite stabilization talk

In downstream markets, price expectations remain bearish. Some market chatter at SNEC suggested that top-tier TOPCon manufacturers were discussing ways to maintain module prices.

However, several industry sources said such discussions have been taking place for years, while aggressive price undercutting continues in the downstream markets.

Some manufacturers were offering modules below prevailing market levels in recent overseas projects, according to trade sources. Transactions from top-tier manufacturers were concluded below $0.11 per watt peak FOB China, well under the market average.

A solar cell manufacturer told OPIS that although wafer and cell prices have stabilized recently, he expects prices to continue moving lower. “It will reach a point where manufacturers have to decide whether to lower prices further or stop production,” the source said.

The source added that some integrated manufacturers have been forced to consume polysilicon inventories by producing more cells and modules, as regulators push companies to reduce inventories and increase cash holdings to repay their debt.

Weak domestic demand pushes focus overseas

One top-tier downstream manufacturer told OPIS that sales were very weak in April following the removal of China’s solar photovoltaic export tax rebate. However, the source said May and June sales have been gradually improving as overseas buyers revisit price discussions after a volatile first quarter.

Another top-five module producer said its June production increased by around 2 gigawatts as export activity picked up. The manufacturer added that export markets have been stronger than the domestic market, and it expects overseas sales to account for around 60% of total sales this year, with domestic sales making up the rest.

China’s domestic installations have fallen sharply this year. From January to April, China installed around 50.9GW of solar capacity, roughly half of the volume recorded over the same period last year. April installations rose modestly from March to 9.52GW but were still down around 79% from a year earlier.

“Domestic demand has not been good, so many manufacturers are talking about pushing more module sales into export markets. We think this will pressure FOB prices this year,” an industry source said.

While operating rates are expected to increase in June, several trade sources said the rise would likely be marginal. Average operating rates for cells and modules were still expected to hover around 40%-50% in the third quarter.

“Even though sales and production are higher, operating rates will still be low because we are sitting on high inventories and there is a lot of pressure to sell,” a manufacturer said.

Energy security offers longer-term module support

Still, the outlook is not entirely downbeat. Several industry participants at SNEC said geopolitical tensions and higher energy prices could support longer-term solar demand, even if they are unlikely to materially improve the market balance this year.

Several Chinese module manufacturers said geopolitical tensions could support solar adoption over the longer term, as governments look to improve energy security and reduce reliance on volatile fossil fuel markets. However, they also noted that policies and project pipelines take time to develop, meaning near-term exports may remain under pressure.

“The Middle East situation has encouraged solar adoption, with policies and subsidies being rolled out across Southeast Asia. But in the short term, I don’t think this will improve the export situation because policies take time to develop. It may help increase demand over the longer term,” a Chinese manufacturer source handling Southeast Asian sales told OPIS.

Higher energy prices have pushed governments to raise solar adoption as part of longer term energy security strategies. Several Asian governments have increased renewable energy targets, regulatory and financial support, subsidies and market deregulation to speed up solar deployment.

Several Chinese module sales representatives also said they have seen stronger interest in residential solar modules, both domestically and in overseas markets. Demand has been particularly noticeable for residential modules and easy-to-install balcony solar systems, which can be purchased more easily without going through lengthy policy or project approval processes.

“China’s module prices are still considered low even after the recent price increases caused by the removal of the export tax rebate. If we look at global electricity prices, which have increased substantially, the financial payback period for solar installations has definitely shortened,” a top-tier module manufacturer told OPIS during an SNEC meeting.

A Middle Eastern module buyer said container freight costs have been a significant cost factor of overall landed costs, with freight rates between China and the Middle East rising over fourfold.

The buyer added that Middle East tensions affected export volumes to the region in the first half of 2026 due to route blockages and container availability constraints. However, the source said shipments have gradually resumed, with several projects expected to come online this year and more module deliveries expected between 2027 and 2029.

According to Ember data, China’s solar module shipments to the Middle East reached 2.14GW in January, almost double year on year. However, shipments in March fell sharply by 54% and 60%, respectively, as the Iran conflict restricted trade flows into the region.

Beyond freight, the buyer said they are also monitoring long-term solar module prices closely, as oil market volatility could affect production costs for module materials such as silver, ethylene vinyl acetate, polyolefin elastomer and aluminium.

—Reporting by Brian Ng, bng@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com