Core Viewpoint - The Chinese photovoltaic (PV) industry is experiencing intense "involution" despite significant growth, with cumulative installed capacity exceeding 1 billion kilowatts. Recent government policies aim to address this issue by promoting high-quality development and regulating competition [1][3]. Industry Challenges - The PV industry faces a dual challenge of excess production capacity and limited demand, leading to severe price declines across the supply chain, including polysilicon, wafers, cells, and modules. This situation is exacerbated by factors such as local government competition, capital influx, and international pressures [3][4]. - The installed capacity of solar power reached 1.1 billion kilowatts by mid-2025, marking a 54.2% year-on-year increase. However, the actual contribution of wind and solar energy to the grid remains low, at only 11%-12%, far below the 25% target [3][4]. Policy and Market Mechanisms - The government is focusing on policy guidance to combat "involution" in the PV sector, with recent meetings emphasizing the need for regulatory measures to eliminate disorderly competition and promote product quality [7][8]. - The transition to a market-based pricing mechanism for renewable energy, as outlined in the "136 document," signifies the end of fixed electricity prices and aims to enhance market efficiency and investment stability [8][9][10]. Corporate Strategy and Transformation - Companies in the PV sector must adapt to a new competitive landscape by enhancing core capabilities, shifting from reliance on resources and capital to innovation, operational excellence, and international market engagement [10]. - The emphasis on product quality and technological advancement is crucial for long-term sustainability, as low-price bidding practices have led to subpar products and financial losses for manufacturers [5][6].