Aiko Solar: How a Solar Price War Broke the Business in 2024, and Why 2025 Was Only a Partial Recovery
In 2024, Aiko Solar looked like a broken business. Revenue collapsed, gross profit turned negative, cash flow turned sharply negative, and the company reported a large net loss. But when we read the annual report carefully, the story was not simply “bad management” or “bad products”. The company was caught in a brutal solar manufacturing price war, while also trying to move from older solar-cell technology into higher-value All Back Contact solar modules. (1)
By 2025, the business had clearly improved. Revenue recovered, cash flow turned positive, inventory write-downs fell sharply, and the All Back Contact module business became the company’s main growth engine. However, the company had not fully recovered financially. It was still loss-making, and its older solar-cell business continued to drag down the group. (2)
This article explains what happened in plain language.
First, what is the difference between a solar cell and a module?
A solar cell is the small electricity-generating part inside a solar panel. It converts sunlight into electricity. A solar module is the finished solar panel: many solar cells connected together, protected under glass, sealed, wired, and made ready for installation. Aiko describes its business as providing solar cells, N-type All Back Contact modules, and scenario-based photovoltaic energy solutions. (2)
A simple way to think about it is this:
Solar cell = one electrical tile.
Solar module = the finished solar panel made from many electrical tiles.
This difference matters because selling cells is more like selling components to other manufacturers. Selling modules is closer to selling a finished branded product to installers, distributors, commercial customers, or solar farms. A branded module can have more room for differentiation: higher efficiency, better appearance, stronger warranty, better fire safety, lower heat loss, and more value for the customer.
The key financial terms
Revenue means the money a company receives from selling products.
Cost of sales means the direct cost of making and delivering those products. For a solar manufacturer, this can include silicon wafers, silver paste, glass, labour, factory depreciation, energy, packaging, and production overhead.
Gross profit means what is left after subtracting cost of sales from revenue.
The formula is:
\[\text{Gross profit} = \text{revenue} - \text{cost of sales}\]Gross margin means gross profit as a percentage of revenue. It tells us how much profit the company keeps from each unit of sales before paying for selling expenses, administration, research, interest, and tax.
The formula is:
\[\text{Gross margin} = \frac{\text{gross profit}}{\text{revenue}}\]For example, if a company sells a product for RMB 100 and it costs RMB 90 to make, the gross profit is:
\[\text{RMB }100 - \text{RMB }90 = \text{RMB }10\]The gross margin is:
\[\frac{\text{RMB }10}{\text{RMB }100} = 10\%\]If the company sells for RMB 100 but the product costs RMB 110, the gross profit is:
\[\text{RMB }100 - \text{RMB }110 = -\text{RMB }10\]The gross margin is:
\[\frac{-\text{RMB }10}{\text{RMB }100} = -10\%\]That means the company is losing money before even paying head-office costs, sales staff, research, interest, or tax.
What went wrong in 2024?
Aiko’s 2024 annual report describes an industry-wide solar price war. The company says that product prices had fallen by more than 30% from previous highs, and that many companies were selling at irrational prices below production cost. It also says downgraded products, debt-settlement products, returned overseas products, and no-warranty modules were circulating at very low prices, which further damaged market pricing. (1)
This was not a normal competitive market. It was an overcapacity cycle.
Overcapacity means there are too many factories producing too much product compared with customer demand. If ten companies all need to keep their factories running, but there are not enough profitable orders for everyone, they may cut prices to win business. One company cuts prices, then another company cuts prices more, and eventually the whole industry suffers.
That is what I mean by a solar price war.
Aiko’s revenue fell from RMB 27.170 billion in 2023 to RMB 11.155 billion in 2024. The fall was:
\[\text{RMB }27.170\text{ billion} - \text{RMB }11.155\text{ billion} = \text{RMB }16.015\text{ billion}\]To calculate the percentage fall:
\[\frac{\text{RMB }16.015\text{ billion}}{\text{RMB }27.170\text{ billion}} = 58.94\%\]So Aiko lost almost 59% of its revenue in one year.
The gross profit problem was even more revealing. In 2024, Aiko reported revenue of RMB 11.155 billion and cost of sales of RMB 12.264 billion. (1)
The calculation is:
\[\text{Gross profit} = \text{revenue} - \text{cost of sales}\] \[\text{Gross profit} = \text{RMB }11.155\text{ billion} - \text{RMB }12.264\text{ billion}\] \[\text{Gross profit} = -\text{RMB }1.109\text{ billion}\]Now calculate the gross margin:
\[\text{Gross margin} = \frac{-\text{RMB }1.109\text{ billion}}{\text{RMB }11.155\text{ billion}}\] \[\text{Gross margin} = -9.94\%\]So for every RMB 100 of sales in 2024, Aiko lost about RMB 9.94 at the gross profit level.
This is why the business looked so bad. It was not just that net profit was weak. The company was losing money before many ordinary business expenses were even counted.
But why would a company sell below cost?
At first, selling below cost sounds irrational. But in manufacturing, “cost” does not only mean the materials inside one product. It can include factory labour, depreciation, energy, maintenance, and overhead. A factory can be expensive even when it is not running at full capacity.
Imagine a factory has fixed costs of RMB 100 million per year. These costs do not disappear just because sales are weak. If the factory produces 10 million units, the fixed cost per unit is:
\[\frac{\text{RMB }100\text{ million}}{10\text{ million units}} = \text{RMB }10\text{ per unit}\]If sales collapse and the factory produces only 2 million units, the fixed cost per unit becomes:
\[\frac{\text{RMB }100\text{ million}}{2\text{ million units}} = \text{RMB }50\text{ per unit}\]The factory did not necessarily become worse. The problem is that each product now carries a much heavier share of the fixed cost.
Aiko’s 2024 production data supports this problem. Its older PERC cell production still ran at 91% utilisation, but TOPCon cell utilisation was only 45%, and All Back Contact module utilisation averaged only 49% for the year, although it improved to 78% by year-end. (1)
Utilisation means how much of the factory’s capacity is actually being used. A 49% utilisation rate means a lot of factory capacity is not yet being fully used. That tends to make each product more expensive because the fixed factory costs are spread across fewer units.
There was also an inventory problem.
Inventory means products or materials the company has already bought or made but has not yet sold. An inventory write-down happens when the company admits that inventory is no longer worth what it originally cost.
The formula is:
\[\text{Inventory write-down} = \text{original inventory cost} - \text{recoverable value}\]For example, suppose a company made solar panels at a cost of RMB 100 each. Later, market prices collapse, and the company can only sell those panels for RMB 70 after selling costs. The write-down is:
\[\text{RMB }100 - \text{RMB }70 = \text{RMB }30\]That RMB 30 becomes a loss.
At the end of 2024, Aiko had gross inventory of RMB 3.927 billion and inventory write-down provisions of RMB 1.378 billion. The provision ratio was: (1)
\[\frac{\text{RMB }1.378\text{ billion}}{\text{RMB }3.927\text{ billion}} = 35.1\%\]That means more than one-third of the gross inventory value had been provided against. Finished goods were even worse: finished goods had a gross value of RMB 3.192 billion and write-down provisions of RMB 1.285 billion. The finished-goods provision ratio was:
\[\frac{\text{RMB }1.285\text{ billion}}{\text{RMB }3.192\text{ billion}} = 40.3\%\]So about 40% of the gross value of finished goods had been written down.
This is a very important clue. Aiko was not merely having a bad sales year. It had products on the balance sheet that were no longer worth their original cost because the solar market price had collapsed.
The product-level numbers show the damage
In 2024, Aiko’s main business had revenue of RMB 10.987 billion and cost of RMB 12.164 billion. The main-business gross margin was negative 10.71%. (1)
The calculation is:
\[\text{Gross profit} = \text{RMB }10.987\text{ billion} - \text{RMB }12.164\text{ billion}\] \[\text{Gross profit} = -\text{RMB }1.177\text{ billion}\] \[\text{Gross margin} = \frac{-\text{RMB }1.177\text{ billion}}{\text{RMB }10.987\text{ billion}}\] \[\text{Gross margin} = -10.71\%\]Both the solar-cell and module businesses were loss-making in 2024.
Solar cells:
Revenue = RMB 5.349 billion
Cost = RMB 5.976 billion
Gross profit:
\[\text{RMB }5.349\text{ billion} - \text{RMB }5.976\text{ billion} = -\text{RMB }0.627\text{ billion}\]Gross margin:
\[\frac{-\text{RMB }0.627\text{ billion}}{\text{RMB }5.349\text{ billion}} = -11.71\%\]Modules:
Revenue = RMB 4.961 billion
Cost = RMB 5.418 billion
Gross profit:
\[\text{RMB }4.961\text{ billion} - \text{RMB }5.418\text{ billion} = -\text{RMB }0.456\text{ billion}\]Gross margin:
\[\frac{-\text{RMB }0.456\text{ billion}}{\text{RMB }4.961\text{ billion}} = -9.20\%\]This means the whole operating model was under pressure. The company was not yet getting enough benefit from its newer module strategy, and its older cell business was suffering from the price war.
Why Aiko did not simply move earlier into newer technology
This was one of the most important questions in our discussion.
The answer is not that Aiko ignored new technology. The better answer is that Aiko chose a more differentiated technology route, but the commercial ramp was not fast enough to protect the business before the 2024 price collapse hit.
Solar technology did not move from one simple old product to one simple new product. There were several routes.
PERC was the older mainstream cell technology.
TOPCon was a newer cell technology that many companies adopted because it was easier to upgrade from existing production lines.
All Back Contact was Aiko’s chosen high-efficiency technology route. In this design, electrical contacts are moved to the back of the cell, helping the front receive more sunlight and improving appearance.
Aiko’s strategic choice was not merely “make more TOPCon”. It tried to build a differentiated All Back Contact platform. The risk was timing. A more differentiated technology can take longer to scale because the company must improve production yield, reduce cost, win customer trust, get certifications, build sales channels, and prove product reliability.
This is why 2024 was a painful transition year. The old PERC business was losing pricing power, the TOPCon business was crowded, and the All Back Contact business was still scaling.
What changed in 2025?
The most important change in 2025 was that the All Back Contact module business became much larger.
Aiko reported 2025 revenue of RMB 15.614 billion, up 39.97% from 2024. Its net loss attributable to shareholders narrowed from RMB 5.319 billion in 2024 to RMB 1.822 billion in 2025. Operating cash flow moved from negative RMB 4.520 billion in 2024 to positive RMB 2.327 billion in 2025. (2)
Operating cash flow means the cash generated or consumed by the ordinary business. It is important because accounting profit can be affected by non-cash items, but cash flow shows whether the business is bringing in or burning cash through operations.
The improvement was large:
\[\text{Change in operating cash flow} = \text{2025 operating cash flow} - \text{2024 operating cash flow}\] \[\text{Change} = \text{RMB }2.327\text{ billion} - (-\text{RMB }4.520\text{ billion})\] \[\text{Change} = \text{RMB }6.847\text{ billion improvement}\]That is a major recovery in cash terms.
Gross profit also turned positive.
In 2025, revenue was RMB 15.614 billion and cost of sales was RMB 15.210 billion. (2)
The calculation is:
\[\text{Gross profit} = \text{RMB }15.614\text{ billion} - \text{RMB }15.210\text{ billion}\] \[\text{Gross profit} = \text{RMB }0.404\text{ billion}\] \[\text{Gross margin} = \frac{\text{RMB }0.404\text{ billion}}{\text{RMB }15.614\text{ billion}}\] \[\text{Gross margin} = 2.59\%\]This is much better than 2024’s negative 9.94% gross margin. But 2.59% is still very thin. A company with such a small gross margin can still lose money after paying for sales staff, administration, research, interest, and tax.
The module business became the recovery engine
In 2025, All Back Contact module revenue reached RMB 10.655 billion, accounting for 68% of Aiko’s annual revenue. Module sales volume reached 14.71 gigawatts, up 132% year on year, and products were sold into nearly 70 countries and regions. (2)
This is the centre of the recovery story.
The product-level numbers show the difference clearly. In 2025, modules had revenue of RMB 10.655 billion and cost of RMB 10.123 billion.
The calculation is:
\[\text{Module gross profit} = \text{RMB }10.655\text{ billion} - \text{RMB }10.123\text{ billion}\] \[\text{Module gross profit} = \text{RMB }0.532\text{ billion}\] \[\text{Module gross margin} = \frac{\text{RMB }0.532\text{ billion}}{\text{RMB }10.655\text{ billion}}\] \[\text{Module gross margin} = 5.00\%\]That means for every RMB 100 of module sales, Aiko kept about RMB 5 at the gross level.
The solar-cell business was still weak. In 2025, solar cells had revenue of RMB 3.447 billion and cost of RMB 3.741 billion.
The calculation is:
\[\text{Cell gross profit} = \text{RMB }3.447\text{ billion} - \text{RMB }3.741\text{ billion}\] \[\text{Cell gross profit} = -\text{RMB }0.294\text{ billion}\] \[\text{Cell gross margin} = \frac{-\text{RMB }0.294\text{ billion}}{\text{RMB }3.447\text{ billion}}\] \[\text{Cell gross margin} = -8.54\%\]That means for every RMB 100 of solar-cell sales, Aiko lost about RMB 8.54 at the gross level.
This is the clearest way to understand Aiko’s position in 2025. The new module business was profitable at the gross level. The old solar-cell business was still losing money. Aiko had improved, but the recovery was incomplete.
Overseas sales were much healthier than domestic sales
Another discovery was that Aiko’s overseas module business was much stronger than its domestic module business.
In 2025, domestic module gross margin was negative 1.40%, while overseas module gross margin was positive 11.48%. The company’s European All Back Contact module business had a gross margin of 13.01%, and Oceania had a gross margin of 15.47%. (2)
This matters because it tells us where the product has pricing power.
Pricing power means the ability to charge a good price without losing too many customers. Aiko’s All Back Contact modules appear to have better pricing power overseas than in China.
The 2025 annual report also says that Aiko’s overseas All Back Contact module prices maintained a 10% to 50% premium over conventional TOPCon products. It also says the company had matured silver-free technology at the Zhuhai base and introduced low-silver technology at the Yiwu base, helping reduce cost. (2)
Silver is important because solar cells use silver paste to conduct electricity. If silver prices rise, production cost rises. Reducing silver use helps protect margins.
Technology clearly improved
Financially, 2025 was only a partial recovery. Technologically, the picture was stronger.
Aiko reported that by the end of 2025 it had filed 3,788 patents and received 1,346 patent authorisations. Of these, 1,910 patent applications were related to Back Contact technology, with 750 authorisations. (2)
A patent is legal protection for an invention. It does not guarantee profits, but it can help protect a company’s technology from easy copying.
Aiko also pushed its All Back Contact module technology into more markets. In 2025, the company described the technology as moving beyond residential and commercial rooftops into larger centralised solar projects. It also planned to upgrade existing PERC and TOPCon production lines into Back Contact production lines, using existing land, factories, and equipment as much as possible. (2)
This is important because it means Aiko is trying not to waste all of its old factory base. It is trying to convert old capacity into new capacity.
The inventory problem improved
One of the strongest signs of recovery was inventory.
At the end of 2024, Aiko had gross inventory of RMB 3.927 billion and write-down provisions of RMB 1.378 billion. At the end of 2025, gross inventory had fallen to RMB 2.837 billion and write-down provisions had fallen to RMB 354 million. (1, 2)
Calculate the 2025 provision ratio:
\[\frac{\text{RMB }354\text{ million}}{\text{RMB }2.837\text{ billion}} = 12.5\%\]Compare that with 2024:
\[\frac{\text{RMB }1.378\text{ billion}}{\text{RMB }3.927\text{ billion}} = 35.1\%\]This is a major improvement. It suggests that the extreme inventory damage from the 2024 price collapse had eased.
However, this does not mean the company was fully healthy. It still made a large net loss in 2025, and the fourth quarter was weak. In the fourth quarter alone, Aiko reported a net loss attributable to shareholders of RMB 1.290 billion. (2)
The 2026 export rebate problem
There is another important issue after 2025. China announced that it would eliminate value-added tax export rebates for photovoltaic products from 1 April 2026. Reuters reported that the policy removes rebates for photovoltaic products and phases down battery rebates, and described the change as part of China’s attempt to address overcapacity and intense price competition. (3)
Value-added tax is a tax charged through the production and sales chain. An export rebate means the exporter can recover some tax when selling abroad. If the rebate disappears, the exporter loses a cost benefit.
This is not good short-term news for Aiko because overseas modules were one of its healthiest business lines in 2025.
A simple example shows the risk.
Aiko’s 2025 overseas module revenue was about RMB 5.291 billion. The overseas module gross margin was 11.48%. (2)
Gross profit calculation:
\[\text{RMB }5.291\text{ billion} \times 11.48\% = \text{RMB }607\text{ million}\]China had previously reduced the export rebate rate for photovoltaic products from 13% to 9%. (4) If a 9% export rebate benefit disappeared and Aiko had to absorb the full cost itself, the theoretical hit would be:
\[\text{RMB }5.291\text{ billion} \times 9\% = \text{RMB }476\text{ million}\]Remaining gross profit would be:
\[\text{RMB }607\text{ million} - \text{RMB }476\text{ million} = \text{RMB }131\text{ million}\]New implied gross margin:
\[\frac{\text{RMB }131\text{ million}}{\text{RMB }5.291\text{ billion}} = 2.5\%\]This is only a simplified illustration. The real impact depends on contracts, pricing, customer negotiations, exchange rates, and tax mechanics. But it shows the direction clearly: losing the export rebate could eat a large part of overseas gross profit if the cost cannot be passed on to customers.
There is a second side to this. If all Chinese exporters lose the rebate together, the industry may be forced to raise export prices. That could reduce destructive price competition. For Aiko, the key question is whether its All Back Contact modules are differentiated enough to pass higher costs to customers.
The final judgement
Aiko’s 2024 was a collapse caused by three forces hitting at once.
First, the solar industry entered a severe price war caused by overcapacity.
Second, Aiko was still carrying too much exposure to older solar-cell business and under-utilised new capacity.
Third, market prices fell so quickly that inventory had to be written down.
Aiko’s 2025 was not a full recovery, but it was a real improvement.
Revenue rose. Gross profit turned positive. Operating cash flow turned positive. Inventory damage reduced. All Back Contact modules became the main business. Overseas module margins showed genuine pricing power.
But the company was still not fully healed.
The group remained loss-making. The old solar-cell business still had negative gross margin. The fourth quarter was weak. The 2026 export rebate removal may pressure overseas margins. The company still has to prove that its All Back Contact technology can produce not only better panels, but also sustainable profits.
The simplest summary is this:
In 2024, Aiko was a solar manufacturer trapped in a price war and a technology transition.
In 2025, Aiko became a company with a real premium module engine, but still carrying legacy losses.
The next test is not whether the technology is impressive. The next test is whether the technology can earn enough money to repair the whole business.