Chinese Solar Firms Target Space-Based Power Markets

Years of crippling oversupply and collapsing profit margins are forcing China's dominant solar manufacturing industry to explore extraterrestrial markets for growth, according to a report from Bloomberg on 5 June 2026. The strategic pivot focuses on supplying materials and components for space-based solar power (SBSP) projects, a nascent market projected to reach $1 billion by 2030. This move represents a fundamental shift from commoditized terrestrial panels to high-value, specialized aerospace-grade products.

Context — why this matters now

The Chinese solar industry has been plagued by a severe supply glut since 2023, driving panel prices down over 60% and eroding manufacturer profitability. This oversupply was fueled by massive state-subsidized capacity expansion, which saw China's share of global polysilicon, wafer, cell, and module production exceed 80%. The last comparable industry-wide margin compression occurred in 2012, leading to a wave of consolidations and bankruptcies among Western manufacturers.

The current macro backdrop of low terrestrial solar demand growth exacerbates the pressure. With global interest rates remaining elevated, financing for large-scale utility projects has slowed, further suppressing demand for new panels. The catalyst for the space pivot is a confluence of technological readiness in ultra-light solar cells and increased government and private funding for SBSP demonstrations.

Data — what the numbers show

Key metrics underscore the terrestrial industry's distress and the potential scale of the new market. The average selling price for Chinese solar modules plummeted to $0.10 per watt in Q1 2026, down from $0.25 per watt just three years prior. Industry-wide operating margins compressed to 3.5%, a fraction of the 15-20% margins seen in the early 2020s.

Metric	Terrestrial Solar	Space-Based Solar
ASP per watt	$0.10	$50.00+
Market Growth	5% CAGR	45% Projected CAGR

In contrast, prototypes for space-based solar arrays command prices exceeding $50 per watt due to their need for extreme efficiency and radiation resistance. The global SBSP market is currently valued at approximately $120 million but is projected by the National Space Society to grow at a 45% compound annual growth rate through 2030.

Analysis — what it means for markets / sectors / tickers

The pivot benefits leading Chinese vertically integrated manufacturers with R&D capabilities, such as LONGi Green Energy Technology (601012.SS) and Trina Solar (688599.SS), which have already announced pilot production lines for space-grade cells. These firms could capture a significant portion of the high-margin SBSP supply chain, potentially boosting their earnings by 5-10% within five years. Aerospace component suppliers and satellite manufacturers like Maxar Technologies (MAXR) also stand to gain from increased demand for assembly and deployment services.

A key risk is the technological and economic viability of beaming power back to Earth, which remains unproven at scale. Skeptics point to the high launch costs and energy transmission losses as significant hurdles. Current market positioning shows venture capital and strategic corporate investment flowing into startups dedicated to in-orbit assembly, indicating where early-stage confidence lies.

Outlook — what to watch next

The CALT-1 technology demonstration satellite, a joint venture between China Aerospace Science and Technology Corporation and several solar firms, is scheduled for launch in Q4 2026. Its success in testing lightweight panel deployment and microwave power transmission will be a critical catalyst for the entire sector. The next National Congress in March 2027 will also be pivotal, as it may include updated five-year plan directives specifically allocating funding for SBSP development.

Market participants should monitor the cost per kilogram for heavy-lift launches, with a break below $1,000 viewed as essential for economic feasibility. Key technical milestones to watch include achieving a panel efficiency rating above 35% in radiation-heavy environments and successfully demonstrating wireless power transfer over distances exceeding 100 kilometers.

Frequently Asked Questions

What is space-based solar power?

Space-based solar power involves collecting solar energy in orbit, where sunlight is more intense and continuous, and transmitting it wirelessly to Earth via microwaves or lasers. This technology promises a baseload renewable power source unaffected by weather or night cycles, but it requires overcoming major challenges in cost-efficient launch and safe energy transmission.

How does this affect US and European solar companies?

The Chinese pivot into aerospace-grade solar products could create a new competitive front. US and European firms like First Solar (FSLR) currently focus on differentiated terrestrial technologies. They may face pressure to innovate further or risk ceding the next frontier of high-value solar applications, though they are largely insulated from the low-margin commodity panel market.

What are the biggest barriers to space-based solar power?

The primary barriers are exceptionally high launch costs, the need for autonomous robotic in-orbit assembly, and the efficiency of wireless power transmission through the atmosphere. Regulatory frameworks for continuously beaming microwaves from space to receiving stations on Earth also remain undeveloped and could pose significant approval challenges.

Bottom Line

Chinese solar manufacturers are aggressively pursuing space-based power to escape terrestrial commoditization and capture a nascent high-margin market.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. CFD trading carries high risk of capital loss.