Li Zhenguo, President of LONGi Green Energy: The Photovoltaic Industry Needs Urgent Transformation to Overcome Its Winter
In recent years, the photovoltaic industry has experienced a period of rapid growth, but it is now facing a severe problem of overcapacity. As a leading company in the sector, LONGi Green Energy has also been impacted, reporting significant losses in 2024. In response to this challenge, LONGi is reflecting on its experiences and calling for the industry to slow down, while continuing to innovate technologically and expanding the application scenarios for photovoltaic energy.
Li Zhenguo, founder and president of LONGi Green Energy, attributes the company’s achievements to the collective efforts of the team. “We always adhere to the principle of ‘doing good without asking what the future holds,’ striving to promote the development of the photovoltaic industry,” he stated. Recently, we officially launched our 25th anniversary theme, ‘Endless Life,’ which is a heartfelt tribute to the past and a courageous outlook toward the future. The last 25 years have been built on the hard work of all those involved in the photovoltaic industry. Everyone has contributed to this epic journey, and today’s photovoltaic world is shaped by each of us.
Reflecting on the past two years, the industry has faced an unprecedented winter, yet it is crucial to take a moment to reflect and strategize. Through technological innovation, we aim to reduce costs and improve efficiency.
Several key events have transformed the industry: the RCZ technology, the introduction of diamond wire, and the application of PERC technology. In 2015, at the Solar Power International Exhibition in Munich, a German colleague referred to me as ‘the person who changed the entire industry.’ At that time, the photovoltaic industry showed a clear divergence in technology paths, with many companies leaning towards polycrystalline technology. However, LONGi quietly worked in the monocrystalline field and achieved remarkable results. Monocrystalline technology, with its perfect crystal structure, theoretically has higher conversion efficiency, but its high costs have historically hindered large-scale adoption. LONGi identified this issue a decade ago and made reducing the cost of monocrystalline technology a core research and development focus. The successful breakthrough of RCZ technology was particularly pivotal. We launched the ‘616’ project to tackle technical challenges in the monocrystalline pulling process. The data speaks volumes: in 2005, the non-silicon cost of monocrystalline was as high as 300 yuan per kilogram, but by 2020, it had drastically decreased to 20 yuan. This significant change is largely attributed to the successful application of RCZ technology.
Regarding diamond wire technology, the early slurry wire cutting process had many drawbacks, such as high silicon wafer loss and low cutting efficiency. Between 2013 and 2015, LONGi actively introduced and successfully applied diamond wire cutting technology. Today, cutting a silicon wafer with this technology results in only 0.3 wafer loss and has significantly reduced cutting time to one hour, with cutting costs plummeting from 5-6 yuan in 2005 to just 0.3 yuan in 2020. This technological innovation has greatly improved production efficiency and effectively lowered production costs.
The integration of PERC technology with RCZ and diamond wire cutting has fundamentally altered the competitive landscape between monocrystalline and polycrystalline technologies in the photovoltaic market. The widespread adoption of bifacial PERC technology in 2017 laid a solid foundation for reducing the cost of photovoltaic electricity, facilitating a transformative leap in photovoltaic power generation.
Today, we can take pride in the fact that LONGi has driven and led technological advancements and cost reductions in the photovoltaic industry, making photovoltaic power the cheapest energy source in most countries and regions worldwide. At the same time, photovoltaic power generation has become a key component in our future energy transition and carbon neutrality efforts. This represents a qualitative change and stands as LONGi’s greatest achievement over the past 25 years.
From the beginning, LONGi’s involvement in the photovoltaic industry has always revolved around a central theme: continually reducing the cost per kilowatt-hour. The introduction of Germany’s Feed-in Tariff Law in 2004 propelled the growth of the photovoltaic sector. LONGi officially entered the photovoltaic industry in 2005, conducting in-depth research on the service nature and competitive landscape of the industry. We compared crystalline silicon and thin-film technologies, as well as polycrystalline and monocrystalline technology paths, ultimately determining that monocrystalline technology was the lowest-cost route for future electricity generation.
We recognized that the photovoltaic industry would inevitably become a highly competitive landscape, necessitating the development of competitive capabilities under conditions of surplus. LONGi established three competitive strategies: first, focusing on breakthroughs in the pulling and slicing processes; second, refusing to sign long-term contracts for fixed prices and quantities of polysilicon; and third, opting to build factories in the west to reduce electricity costs. These strategies have helped LONGi gain a competitive edge over the past 25 years.
LONGi’s success is attributed to a profound understanding of the photovoltaic industry and a steadfast belief in its importance for sustainable human development. We have committed all of our resources and energy to this sector. Our R&D investment and innovation have never ceased. In November 2022, LONGi’s R&D team set a world record for crystalline silicon cell conversion efficiency at 26.81%. By May 2024, we raised this record to 27.30%. Additionally, we achieved a world record of 34.6% in the crystalline silicon-perovskite tandem cell area and broke a 36-year record for crystalline silicon module efficiency with HPBC 2.0 components in October 2024. LONGi’s innovative capacity is bolstered by the dedication of our scientists. Dr. Xu Xixiang, LONGi’s chief scientist, and his team have made significant breakthroughs in the photovoltaic field. In 2024, Dr. Xu was awarded the William R. Cherry Award, becoming the first Chinese scientist to receive this honor. Their success is the result of long-term efforts and persistence, reflecting LONGi’s commitment to R&D.
Confidence is key to breaking through the winter
In recent years, the photovoltaic industry has undergone a rapid expansion, but it also faces serious issues of overcapacity, leading to a winter phase in industry development. The production capacity that has formed over the past two years has reached 2-3 times the total of the previous 20 years, significantly exceeding actual market demand, which has intensified competition and resulted in serious internal struggles.
Looking back to the first half of 2020, the photovoltaic industry had a capacity of only 100 gigawatts. Based on my analysis of industry trends, I anticipated that the capacity would triple within five years to reach 300 gigawatts, and could potentially reach 1,000 gigawatts in ten years. However, the actual growth was much faster than expected, with the photovoltaic industry reaching 300 gigawatts as early as 2022. This rapid growth, while initially beneficial for the industry, has led to market overextension, prompting a profound adjustment in the sector.
During this industry winter, LONGi has also faced challenges, reporting substantial losses in 2024. In confronting this situation, we have chosen to maintain an honest approach with the market and investors, promptly releasing performance forecasts and transparently disclosing our operational status. Despite these challenges, I remain optimistic about the long-term prospects of the photovoltaic industry. With the growing global consensus on carbon neutrality, photovoltaic energy, as a crucial part of clean energy, has vast market potential. It is expected that by 2030, the photovoltaic industry will reach a capacity of 1,000 gigawatts, and by 2035, it may even exceed 1,500 gigawatts, which may still fall short of total market demand.
However, the rapid development of the industry has raised concerns about the resulting overcapacity, which must be addressed thoughtfully. In the past 25 years, LONGi and all photovoltaic industry practitioners have worked together to fulfill the mission of reducing costs, making photovoltaic energy the cheapest electricity source in most countries and regions. In the next 25 years, our focus will be on making photovoltaic energy more accessible and convenient. We need to continue lowering the costs of photovoltaic power generation, expanding application scenarios, and integrating photovoltaic energy with storage solutions. We will also develop hydrogen and ammonia businesses to create off-grid application scenarios for photovoltaic energy, thereby broadening the market space for photovoltaics and contributing to sustainable human development, achieving carbon neutrality goals, and facilitating the global energy transition.
In addition, LONGi Hydrogen Energy will play a vital role in the future energy transition. In December 2024, LONGi Hydrogen Energy signed an investment agreement with HydrogenPro ASA to expand into the European market. We will also explore applications in non-electric fields, such as green alcohol, to provide more solutions for future energy systems.
* This article is based on the speech by Li Zhenguo, founder and president of LONGi Green Energy, during the company’s 25th anniversary. Due to length constraints, some content has been edited.
