Solar Glass

What it is

Solar glass (光伏玻璃) is the cover on the front of a solar module, and on double-glass modules the back as well. It is usually tempered, low-iron glass that has to let through light between 350 and 1,200 nm and stand up to water, impact and ultraviolet light (PVEducation, Honsberg and Bowden). It is melted in furnaces from soda ash and quartz sand, fired with natural gas, fuel oil and electricity (Flat Glass 2026 interim report, p. 15), and capacity is measured in tonnes melted per day (Xinyi Solar 2026 interim results, p. 53). When prices fall, producers take furnaces offline for a "cold repair" (冷修) or close them for good (Flat Glass p. 8).

Why it matters for the chain

Glass is bought by module makers, so it goes where they are: Xinyi Solar says the location of module capacity is one of the main factors deciding where it builds its own (Xinyi p. 46). Flat Glass names Jinko, JA Solar, Tongwei, LONGi, Chint New Energy and DMEGC among its long-term customers, and says supplier relationships are sticky because the glass has to be certified with the modules by authorities in export markets, which takes time and money (Flat Glass p. 10).

Contracts are looser than they look. LONGi and a supplier ended by agreement a contract to buy at least 250 million square metres of solar glass from 2022 to 2026 (LONGi 2026 interim report, p. 38).

Where China stands

Xinyi Solar says global solar glass production remains heavily concentrated in China, which limits what foreign module makers can source locally (Xinyi p. 42). Flat Glass says that in 2006 it became the first Chinese maker to break the hold of the international producers, naming AGC, Pilkington and Saint-Gobain as the benchmarks it matched (Flat Glass p. 9).

• Xinyi Solar (信义光能, 0968.HK) had 22,600 tonnes a day of melting capacity in operation at the end of June 2026, about 20% of it in Malaysia and Indonesia. Its solar glass revenue was ¥7.16bn in the half (Xinyi pp. 45, 53).
• Flat Glass (福莱特, 601865.SH, 6865.HK) took 87.90% of its revenue from solar glass, ¥5.86bn in the half, and has a plant in Vietnam (Flat Glass pp. 7, 14, 119).

Selling below cost

Flat Glass says solar glass prices fell to around cash cost in the first half of 2026, leaving most of the industry loss-making, and that more furnaces went into cold repair (Flat Glass p. 8). Xinyi Solar says mainstream solar glass prices fell more than 20% on a year earlier and hit historic lows in the second quarter, with some orders priced below most makers' average production cost. It cut its sales volume by 5.8%, favouring customers with sound credit (Xinyi p. 46).

• Xinyi's solar glass gross margin fell 8.1 points to 3.3% (Xinyi p. 48).
• Flat Glass's solar glass earned about 6.7% (our calculation from Flat Glass p. 119), and the company lost ¥363m, against a ¥261m profit a year earlier (p. 6).

Abroad pays

The margin is outside China. Flat Glass's sales in China, across all its products, earned a gross margin of about -1.4%, against about 26.7% in the rest of Asia and about 24.3% in North America (our calculations from Flat Glass p. 119). Xinyi says overseas prices kept a premium, helped by higher energy and freight costs, and its overseas share of solar glass sales rose to 38.8% from 31.6% (Xinyi pp. 42, 46).

Both are building abroad. Xinyi's first line in Indonesia started in January 2026, a second is due this year, and a further 2,300 tonnes a day is being planned (Xinyi p. 54). Flat Glass is preparing a US$290m plant in Indonesia (Flat Glass p. 13).

What to watch

• Capacity exits. Xinyi says capacity is shrinking too slowly to match the fall in demand (Xinyi p. 42); Flat Glass expects closures and slower additions to improve the balance (Flat Glass p. 8).
• Overseas customers. Our view: the margin in solar glass now depends on where the customer is. Flat Glass's sales in China earned around nothing while its sales elsewhere in Asia and in North America earned more than 20%, and Xinyi says overseas prices keep a premium; both makers are building in Indonesia to serve those customers.