Photovoltaic Equipment Sector Update: The Dual Catalyst of Terrestrial and Space-Based Solar Expansion

Date: January 25, 2026
Sector: Photovoltaic (PV) Equipment
Rating: Overweight (Maintained)
Analysts: Zhou Ershuang, Li Wenyi

Executive Summary

The global photovoltaic equipment sector is poised for a significant structural upswing, driven by two converging mega-trends: aggressive expansion in US terrestrial solar capacity and the nascent but rapidly accelerating demand for space-based solar power (SBSP). On January 22, 2026, Elon Musk announced at the World Economic Forum (WEF) that Tesla and SpaceX aim to construct 100GW of solar production capacity each, targeting completion by the end of 2028. This announcement serves as a potent catalyst, validating the scalability of silicon-based Heterojunction (HJT) technology for space applications and reinforcing the dominant position of Chinese PV equipment manufacturers.

We maintain an Overweight rating on the PV equipment sector. Our investment thesis centers on the dual opportunity presented by robust overseas ground-mounted demand—particularly in the US—and the emerging "space solar" narrative. We identify silicon-based HJT as the optimal short-to-medium-term solution for satellite power systems due to its cost-efficiency, flexibility, and supply chain maturity, eventually evolving into Perovskite-HJT tandem structures. Chinese equipment leaders, holding >80% global market share in key manufacturing segments, are uniquely positioned to capture value from this exponential growth in satellite launches and terrestrial installations.

Key Takeaways

1. The "Musk Catalyst": 200GW Capacity Pipeline by 2028

Elon Musk’s declaration at Davos outlines a clear roadmap for massive capacity expansion:
* Tesla (Terrestrial): 100GW solar capacity.
* SpaceX (Space-based): 100GW solar capacity for satellite constellations.
* Timeline: Full deployment expected by 2028.

This commitment underscores the urgency for scalable, cost-effective PV manufacturing solutions. It signals a shift from niche, high-cost space energy solutions to industrial-scale deployment, directly benefiting upstream equipment suppliers capable of delivering high-throughput, high-yield production lines.

2. Space Solar: HJT Emerges as the Dominant Technology Path

The proliferation of Low Earth Orbit (LEO) satellites is creating an unprecedented demand for onboard power generation.
* Demand Surge: Global satellite launches are growing exponentially. China’s Radio Innovation Institute has applied for rights to 200,000 LEO satellites, while SpaceX accelerates its 42,000-satellite Starlink network. This translates into GW-level demand for space-grade PV modules.
* Technology Shift: Traditional triple-junction Gallium Arsenide (GaAs) cells face bottlenecks in capacity, cost, and raw material availability, making them unsuitable for GW-scale deployment.
* Why Silicon HJT? Silicon-based HJT technology is identified as the optimal near-term substitute due to:
* Flexibility & Weight Reduction: Critical for launch cost efficiency.
* Cost Efficiency: Significantly lower CAPEX and OPEX compared to GaAs.
* Supply Chain Security: Unconstrained by rare material shortages.
* Long-term Evolution: The industry trajectory points toward Perovskite-HJT tandem cells, which promise higher conversion efficiencies for future generations of space assets.

3. Terrestrial Market: US Demand Accelerates Amidst Chinese Supply Dominance

While space solar captures headlines, the terrestrial market remains the immediate revenue driver.
* US Market Growth: According to Mordor Intelligence (early 2025 forecast), US solar installations are projected to grow at a CAGR >20% from 2024 to 2029. Installations in 2025 alone are expected to exceed 60GW.
* Chinese Equipment Hegemony: Despite geopolitical tensions, Chinese manufacturers dominate the global PV supply chain. In 2024, China accounted for >80% of global capacity in polysilicon, wafers, cells, and modules. This dominance extends to equipment:
* Crystal Growth: Jingsheng Electromechanical leads globally in automatic monocrystalline silicon furnaces.
* Wafer Slicing: Gaoce Shares holds the #1 domestic market share in cutting machines.
* Cell Line Equipment: Maxwell Technologies is one of the few global suppliers capable of providing full-turnkey HJT production lines.
* Module Assembly:奥特维 (Autowell) commands >60% of the global market share for stringers.

4. Investment Implications: Focus on Equipment Leaders

The convergence of space and terrestrial demand creates a favorable environment for equipment vendors with technological moats in HJT and high-precision manufacturing. We recommend focusing on companies with proven export capabilities and leadership in next-gen technologies.

Risks / Headwinds

While the outlook is positive, investors must monitor the following risks:

1. Space Solar Industrialization Delays: The transition from prototype to GW-scale space deployment involves complex engineering and regulatory hurdles. Any delay in SpaceX’s Starlink expansion or China’s satellite network rollout could dampen near-term equipment orders.
2. Technological Execution Risk: The shift to silicon HJT for space applications requires rigorous validation regarding radiation hardness and thermal cycling. Failure to meet performance benchmarks could slow adoption rates. Similarly, delays in Perovskite-HJT tandem commercialization could impact long-term growth narratives.
3. Geopolitical & Trade Barriers: As Chinese equipment makers expand overseas, they face potential trade restrictions, tariffs, or "de-risking" policies in the US and EU markets, which could impede market access despite technological superiority.
4. Competition Intensification: Rapid expansion in PV capacity may lead to oversupply in certain equipment segments, potentially compressing margins for non-differentiated vendors.

Rating / Sector Outlook

Rating: Overweight (Maintained)

We reaffirm our Overweight stance on the PV equipment sector. The industry is transitioning from a phase of pure capacity expansion to one driven by technological iteration (HJT/Perovskite) and new application scenarios (Space Solar). The announcement by Musk serves as a strong validation of the total addressable market (TAM) expansion beyond traditional terrestrial limits.

The sector’s resilience is underpinned by the entrenched dominance of Chinese supply chains. With >80% global market share in core manufacturing stages, Chinese equipment firms are not merely participants but enablers of global solar growth. The specific focus on HJT technology aligns perfectly with the strengths of leading Chinese equipment vendors, creating a synergistic tailwind.

Investment View

The photovoltaic equipment sector presents a compelling risk-reward profile for institutional investors, characterized by visible order books from terrestrial markets and optionality from the high-growth space sector.

Strategic Allocation Recommendation:

1. Core Holding: HJT Equipment Leaders.
   Maxwell Technologies stands out as the primary proxy for the HJT theme. Its ability to provide full-line solutions makes it indispensable for both terrestrial gigafactories and specialized space-module production lines. As the industry standardizes around HJT for space applications, Maxwell’s first-mover advantage in turnkey projects will likely translate into sustained revenue visibility.

2. High-Conviction Picks: Process-Specific Monopolies.
   Autowell and Jingsheng Electromechanical represent "pick-and-shovel" plays in the PV value chain. Autowell’s >60% global share in stringers provides a defensive moat, while its development of 0BB (Zero Busbar) technology positions it well for next-generation module efficiency requirements. Jingsheng’s leadership in crystal growth ensures exposure to the foundational material layer of the industry, which remains critical regardless of cell technology shifts.

3. Satellite Theme Exposure.
   Investors seeking direct exposure to the "Space Solar" narrative should prioritize companies with demonstrated R&D in flexible, lightweight HJT modules. While Gaoce Shares is primarily a terrestrial wafer slicer, its precision technology is adaptable to the thinner wafers required for space applications, offering indirect leverage to the trend.

Conclusion:
The convergence of Musk’s 200GW capacity plan and the exponential rise in satellite deployments marks a inflection point for the PV equipment industry. We advise investors to overweight positions in top-tier equipment manufacturers with strong HJT portfolios and global service capabilities. The dual engine of US terrestrial growth and space-based innovation provides a robust foundation for earnings growth through 2028 and beyond.

Disclaimer: This report is based on information available as of January 25, 2026. It is intended for institutional investors only and does not constitute individual investment advice. Market risks apply; please conduct independent due diligence.