Shenwan Hongyuan Group Co., Ltd. has released a research report stating that against the backdrop of overcapacity and persistently low prices in the polysilicon industry, the finalized mandatory standards are stricter than the draft version and exceed market expectations. This will accelerate the forced exit of outdated capacity, propelling the industry's supply-side consolidation into a substantive stage. Leading integrated enterprises with strong technical upgrade capabilities and superior energy efficiency levels are expected to be the first beneficiaries of the improved supply-demand dynamics and price recovery resulting from this capacity rationalization. Industry competition is anticipated to gradually shift from price wars towards more differentiated competition.

Shenwan Hongyuan Group Co., Ltd.'s key points are as follows:

Key Development

The mandatory national standard "Energy Consumption Quota per Unit Product for Polysilicon and Germanium" (GB29447—2026) has been officially released, replacing GB 29447—2022, and will take effect on January 1, 2027. Compared to the draft released in September 2025, the energy consumption limits in the final version have been comprehensively tightened. Taking the Grade 3 (market access) standard as an example, the energy consumption requirement for rod-shaped silicon has been raised from 6.4 kgce/kg in the draft to 6.3 kgce/kg, while the requirement for the silane fluidized bed method has been increased from 5.0 kgce/kg to 4.6 kgce/kg. The Grade 1 and Grade 2 standards remain unchanged.

The tightening of this final standard, combined with the previously finalized "Minimum Allowable Values of Energy Efficiency and Energy Efficiency Grades for Crystalline Silicon Photovoltaic Modules and Inverters" standard, forms a dual "efficiency-consumption" constraint mechanism. The latter sets entry barriers from the end-product efficiency perspective, while the former tightens the energy consumption red line for upstream polysilicon production. This further solidifies a comprehensive mandatory constraint network covering the entire polysilicon-cell-module industrial chain, accelerating the photovoltaic industry's supply-side consolidation from a policy expectation phase into a substantive implementation phase.

Impact on Existing Capacity

The final standard's comprehensive tightening compared to the draft places nearly half of existing capacity under pressure to meet the new requirements. According to industry statistics, the energy consumption levels of most existing polysilicon capacity are concentrated in the range of 6.3~6.4 kgce/kg. While approximately 84% of capacity can meet the draft standard of 6.4 kgce/kg, only about 45% of capacity can meet the final standard's access threshold of 6.3 kgce/kg. This implies that without technological upgrades, close to half of the existing polysilicon capacity will fail to comply with the mandatory standard effective from 2027, facing risks of production restrictions, shutdowns, or even exit from the market.

Risk Factors

Potential risks include weaker-than-expected enforcement of the standards, lower-than-expected photovoltaic demand, intensifying industry competition, and higher-than-anticipated costs for technological upgrades.