China’s $7 Billion Solar Fund Targets 33% Production Cuts

- China’s MIIT is meeting solar firms to address oversupply and a price war in the renewable energy sector. - A proposed $7 billion fund aims to cut one-third of polysilicon production capacity to stabilize the market. On August 20, 2025, Yicai reported that China’s Ministry of Industry and Information Technology (MIIT) is holding high-level meetings with solar companies this week to address oversupply and an ongoing price war in the renewable energy sector. Scheduled for Wednesday and Thursday, these discussions represent an intensified government push to stabilize the market and ensure the industry's long-term viability. Central to the agenda is a proposed $7 billion fund supported by polysilicon producers, which seeks to reduce the sector’s production capacity by approximately one-third. This initiative aims to curb excessive supply, which has triggered aggressive pricing competition and squeezed profit margins for solar companies in recent years. These meetings, which also involve key state agencies like the National Development and Reform Commission and the state-owned assets regulator, mark the second round of similar discussions Beijing has held in recent months. Concerns continue to grow as China, a dominant force in global renewable energy manufacturing, grapples with balancing domestic market dynamics and maintaining its global competitive edge. This intervention builds on a July 2025 meeting where the MIIT urged 14 leading solar firms, including Longi, Trina, and JA Solar, to mitigate "disorderly" competition and phase out outdated production capacity. While some measures are already underway, such as production cuts by certain glass manufacturers and potential mergers among polysilicon companies, analysts caution that deeper structural issues within the sector may take substantial time to resolve. Beijing’s hands-on approach demonstrates its heightened commitment to addressing market disruptions and fostering sustainable growth in the renewable energy industry.