The photovoltaic industry in 2024 is witnessing a paradoxical clash of extremes, characterized by a severe price war alongside a surge in patent litigationOn one hand, leading companies like Longi Green Energy and Tongwei Co. are grappling with substantial losses in excess of 10 billion yuan due to unprecedented declines in the prices of silicon materials and solar modulesOn the other hand, companies such as Trina Solar are aggressively pursuing patent claims, with recent lawsuits marking record sums, such as Trina's claim against Canadian Solar for over 1 billion yuan.

This tumultuous landscape—with a price war still brewing while a patent war ignites—reflects a profound shift in the industry from reckless growth to a more technology-driven competitive environmentThe adoption of N-type TOPCon technology as the core advancement has seen companies with strong patent portfolios employ legal strategies to re-establish competitive order, leaving smaller players in a precarious situation under the weight of dual pressures.

In 2024, the N-type TOPCon solar cell technology has captured over 60% of the market share, solidifying its position as the primary direction of technological evolution within the solar industryMajor sources such as JinkoSolar, Trina Solar, and JA Solar have amassed significant patent holdings through early adoption strategies and acquisitionsFor instance, JinkoSolar boasts over 460 authorized patents related to TOPCon technology, leveraging them to charge licensing fees from other manufacturers, including signing contracts with two of the top ten global module manufacturers.

Trina Solar's rapid litigation against Canadian Solar came after they acquired patents formerly held by LG Electronics, targeting perceived infringements pertaining to TOPCon modulesTheir strategy appears to aim at suppressing competitive pressures and constraining the international expansion of rivals through financial penaltiesThis legal aggression indicates a broader trend where firms strive to control high-margin markets, such as the U.S., where Trina reported a remarkable gross margin of 34.24% in 2023, significantly higher than the domestic average of 12.17%.

By not just filing lawsuits domestically, Trina Solar has also initiated legal actions in Delaware courts while advancing investigations through the International Trade Commission (ITC). Similarly, JA Solar has opted to engage the European Unified Patent Court (UPC) to bolster its position against competitors like Chint New Energy in the European market.

This intensifying patent warfare is reshaping the competitive dynamics of the industry

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For example, previous disputes, like the four-year PERC patent litigation between Longi Green Energy and Hanwha Q CELLS, have concluded amicably, yet the PERC technology is no longer the forefront of innovationConversely, the ongoing patent strategies around TOPCon are projected to be of strategic value, as analysts forecast that by 2029, TOPCon could dominate over 84% of total production capacity in the industryCompanies holding core patents have the opportunity to accrue revenue through licensing fees, while those lacking technological reserves may face prohibitive barriers to market entry, potentially leading to significant financial damages due to lawsuits.

As a consequence of overcapacity, the industry is becoming increasingly cutthroatGlobal demand for solar modules is estimated at approximately 300 GW in 2024, yet total capacity has soared to 1417 GW, highlighting a severe imbalanceTo capture market share, manufacturers are undercutting even their production costsReportedly, the industry's gross sales margin has plummeted from 21.8% in 2020 to just 15.3% in 2024, with projections indicating that about twenty solar companies are expected to incur losses surpassing 60 billion yuan throughout the year, alongside considerable losses from market leaders like Longi and TCL Zhonghuan.

Despite the nettlesome environment, leading players are innovating to sustain their positions through cost reductions and international expansionJinkoSolar reported a 43.55% rise in revenue with overseas sales accounted for over 50% of its total incomeTrina Solar has also utilized its high-margin operations in the U.S. market to compensate for losses domesticallyTongwei, meanwhile, has pursued vertical integration by attempting to acquire Runyang Co., aiming to reduce costs related to silicon manufacturing.

As price cuts limit profitability, patent litigation imposes additional barriers to entry by raising the technological threshold required for survivalReports indicate that by 2024, seven out of the top ten global module manufacturers have found themselves embroiled in patent disputes, highlighting the risks for companies without patent reserves that venture abroad—essentially becoming instant defendants

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Smaller entities like Daheng Energy have been forced to relinquish their legal rights, ceding market shares to dominant players like Longi and Trina, resulting in a pressing concentration of market power.

Simultaneously, companies are exploring next-generation products to circumvent existing patent barriersTrina Solar is advancing the development of layered cell technologies that combine TOPCon with perovskite, while JinkoSolar is doubling down on BC cell technologyEquipment manufacturers like Autowei have launched high-speed module soldering machines accommodating various technology pathways to attract a wider array of clients.

Amid the fierce competition, some industry stakeholders see value in collaboration, as suggested by JinkoSolar's Vice President Qian Jing, emphasizing cross-licensing agreements to mitigate mutual destructionCurrently, JinkoSolar has formed licensing agreements with multiple manufacturers, promoting a model similar to patent alliances in the telecommunications sector that could alleviate litigation burdens and facilitate the accelerated diffusion of technology—provided that leading companies are willing to share central patents.

In a noteworthy regulatory shift, intellectual property compliance has been woven into evaluation metrics, driving firms to develop compliant management systemsIncidents like Laplace's IPO being inhibited due to patent disputes serve as stark reminders for companies to balance technological innovation with legal risksWith escalating pressures from both policy and market sides, the industry may evolve into a layered architecture dominated by “technological oligarchs” alongside specialized manufacturing firms.

At the heart of the photovoltaic sector's dual challenges lies the ultimate contention of technological profit and cost efficiencyIn the near term, the ongoing price and patent wars are poised to cleanse the industry of ineffective capacities; yet, in the long run, only those companies possessing core technological patents, robust global strategies, and sustainable cash flows will emerge victorious in this transformative energy revolution.

Echoing the sentiments of Chen Gang, Chairman of Aiko Solar, the prevailing axiom rings clear: “Without the foundation of intellectual property, there is no qualification to sit at the negotiating table.” In this intensely competitive arena, survival is reserved not just for the giants, but for those long-term thinkers that respect the rules of innovation.

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