Space-Based Photovoltaics: The Orbital Energy Backbone of the Commercial Space Age

Date: January 6, 2026
Sector: Renewable Energy / Commercial Aerospace
Analysts: Zeng Duohong (S0600516080001), Guo Yanan (S0600523070003), Xu Chengrong (S0600524080007)
Source: Dongwu Securities Research Institute

Executive Summary

The convergence of mature reusable launch vehicle technology and the strategic imperative to secure low-Earth orbit (LEO) spectrum resources has catalyzed an exponential growth phase in the global commercial aerospace sector. As satellite constellations evolve from simple communication nodes to complex, high-power computing platforms, the demand for reliable, lightweight, and efficient on-orbit power systems is becoming the primary bottleneck and value driver in satellite manufacturing. Space-based photovoltaics (PV), specifically solar arrays, represent the only viable long-term energy solution for spacecraft, accounting for approximately 20-22% of total satellite manufacturing costs and over 60% of the power subsystem’s value.

This report analyzes the structural shift in space power requirements driven by the transition to mega-constellations (e.g., Starlink, China’s GW/G60) and the emerging paradigm of Space Computing. We identify a critical divergence in technology routes: while Gallium Arsenide (GaAs) remains the dominant standard for high-reliability missions due to its superior radiation resistance and efficiency (>30%), its high cost and limited supply chain capacity constrain mass deployment. Conversely, the drastic reduction in launch costs enabled by SpaceX has allowed for the adoption of lower-cost crystalline silicon (c-Si) in some Western architectures. However, we posit that Perovskite and Perovskite-Silicon Tandem technologies represent the ultimate disruptive force, offering a unique combination of ultra-high specific power (W/g), low manufacturing costs, and tunable bandgabs ideal for the space environment.

We project that the annual launch of 10,000 LEO satellites could generate a near-term solar array market worth nearly RMB 200 billion. Looking further ahead, the development of gigawatt-scale orbital data centers for AI processing could expand this addressable market into the trillions of RMB. We recommend investors focus on companies pioneering Perovskite tandem technologies and those with established supply chains in space-grade GaAs and Heterojunction (HJT) cells. Our top picks include Junda Shares (002865.SZ) for its strategic entry into space perovskites via partnership with Shangyi Optoelectronics, and Mingyang Smart Energy (601615.SH) for its dual-track layout in flexible GaAs and perovskite R&D. We also highlight Oriental Rise Holdings (300118.SZ), Shanghai Gangwan (605598.SH), and equipment leaders like Maxwell Technologies (300751.SZ) as key beneficiaries of this secular trend.

Key Takeaways

1. The "Moore’s Law" Moment for Space Access: Launch Costs Plummet, Deployment Surges

The commercialization of reusable rocket technology has fundamentally altered the economics of space access. The cost to lift payloads to Low Earth Orbit (LEO) has dropped precipitously, breaking the historical economic barriers that confined space activities to government entities.
* Launch Volume Explosion: Global spacecraft launches have entered an exponential growth cycle. From 237 units in 2016, annual launches surged to over 4,300 units in 2025, representing a Compound Annual Growth Rate (CAGR) of 34% over the decade. Year-over-year growth in 2025 exceeded 50%.
* Cost Deflation: SpaceX’s Falcon 9 has normalized launch costs to approximately $1,400–$1,800/kg ($10,000–13,000 RMB/kg). In contrast, Chinese commercial rockets, largely still relying on expendable launch vehicles (ELVs), face higher unit costs of $6,000–$10,000/kg ($43,000–72,000 RMB/kg). This disparity heavily influences satellite design choices, particularly regarding the weight-to-power ratio of solar arrays.
* Strategic Resource Grab: With LEO spectrum and orbital slots governed by the International Telecommunication Union’s (ITU) "first-come, first-served" rule, nations are racing to deploy constellations. By the end of 2025, over 100,000 satellites had been filed globally. The US (led by Starlink’s ~42,000 planned units) and China (via GW and G60/Qianfan plans totaling >51,000 units) are the primary competitors. ITU mandates require significant milestones (10% deployment within 9 years, 50% within 12 years), creating a rigid, time-bound demand for satellite manufacturing and, by extension, power systems.

2. Solar Arrays: The "Heart" of the Satellite – High Value, High Growth

Power subsystems are critical for satellite operations, supporting everything from station-keeping and thermal control to payload communications and computing.
* Cost Structure: The power subsystem accounts for roughly 20-22% of a satellite’s total manufacturing cost. Within this subsystem, the Solar Array (Sun Wing) constitutes 60-80% of the value, far exceeding the cost of batteries or power control units.
* Volume and Price Expansion: As satellites evolve from simple transponders to multi-functional heavyweights, their power consumption has skyrocketed.
* Starlink Evolution: The solar array area of a Starlink satellite has grown from 22.68 m² in the V1.5 version to 256.94 m² in the upcoming V3 version—a more than 10x increase.
* Market Sizing: Assuming an average annual launch of 10,000 satellites with an average power requirement of 35 kW per satellite, and factoring in economies of scale that reduce unit prices from ~RMB 1,200/W to ~RMB 600/W, the annual market space for space solar arrays could reach RMB 200–220 billion.
* Technical Requirements: Space PV cells must withstand extreme conditions, including high-energy particle radiation, atomic oxygen erosion, and severe thermal cycling (-150°C to +120°C). Consequently, reliability and specific power (Watts per gram) are prioritized over pure cost-per-watt in traditional designs.

3. Technology Routes Diverge: GaAs Dominance vs. The Perovskite Disruption

The choice of solar cell technology is dictated by the trade-off between efficiency/reliability and cost/weight, which is further influenced by launch capabilities.

A. Gallium Arsenide (GaAs): The Current Gold Standard

• Status: Multi-junction GaAs cells are the mainstream technology for high-end space applications (GEO comms, deep space probes, military satellites).
• Performance: Efficiency exceeds 30-31% (AM0 spectrum). They offer exceptional radiation hardness and temperature stability.
• Constraints: High manufacturing complexity (MOCVD processes) and scarce raw materials result in prohibitive costs (RMB 200,000–400,000/m² or >RMB 1,000/W). Global production capacity is limited, making it difficult to scale for tens of thousands of LEO satellites.
• Adoption: Preferred by Chinese manufacturers due to higher domestic launch costs, where minimizing weight (high specific power) is crucial to offset launch expenses.

B. Crystalline Silicon (c-Si): The Low-Cost Alternative for Cheap Launches

• Status: Historically used in early Starlink versions (V0.9/V1.0) and currently in V2 Mini.
• Logic: SpaceX’s low launch cost allows for heavier, less efficient panels. Using terrestrial-grade P-type or N-type silicon cells, reinforced with radiation-hardened packaging (polyimide substrates), significantly reduces unit cost.
• Performance: Efficiency ranges from 18-20%. Specific power is low (~0.07 W/g), requiring larger surface areas.
• Outlook: While viable for LEO comms where area is less constrained than weight, c-Si hits a ceiling for high-power density applications.

C. Perovskite & Tandem Cells: The Future Frontier

• Potential: Perovskite solar cells (PSCs) offer a transformative value proposition for space:
  • Ultra-Lightweight: Specific power can reach 30 W/g (vs. 0.36 W/g for GaAs), drastically reducing launch mass.
  • Low Cost: Solution-processable at low temperatures (<150°C), enabling factory-integrated production with potential module costs below RMB 0.8/W at scale.
  • High Efficiency Potential: Single-junction efficiencies have jumped from 2.6% to >25% in a decade. Perovskite-Silicon Tandem cells break the Shockley-Queisser limit, with lab efficiencies already surpassing 30-32%.
• Challenges: Stability in the harsh space environment (UV degradation, atomic oxygen, thermal shock) remains the primary hurdle. Encapsulation and material engineering are key areas of current R&D.
• Investment Implication: Companies that successfully stabilize perovskite for space use will capture the highest margin segment of the future market.

4. The Next Horizon: Space Computing and Orbital Data Centers

The integration of AI and high-performance computing (HPC) in orbit represents a paradigm shift from "Sense-and-Transmit" to "Sense-and-Compute."
* The Energy-Cooling Advantage: Elon Musk and other industry leaders have highlighted that space offers unlimited solar energy and perfect heat rejection via radiation, solving the two biggest constraints of terrestrial AI data centers: power availability and cooling costs.
* Current Projects:
* China: The "Three-Body Computing Constellation" (Zhejiang Lab) aims for 1,000P of computing power. Guoxing Yuhang’s "Star Compute" plan targets 2,800 computing satellites.
* Global: Starcloud (US) is developing a 5GW orbital data center with a 4km solar array structure. Google’s "Project Taara" and partnerships with Planet Labs explore TPU-equipped satellites.
* Market Impact: If a 10GW space computing infrastructure is realized, the demand for solar arrays would explode. Even at reduced bulk pricing (e.g., RMB 200-300/W), the market size could reach trillions of RMB. This transforms space PV from a niche component market into a foundational infrastructure industry.

Industry Dynamics & Supply Chain Analysis

1. Market Size Sensitivity Analysis

The following tables illustrate the potential market size for space photovoltaics under different deployment scenarios. Note that unit prices are expected to decline as production scales and technology matures.

Table 1: LEO Satellite Solar Array Market Space (Base Case)

Assumptions: Prices decline due to economies of scale and technological optimization. Power demand reflects the trend towards heavier, multi-payload satellites.

Table 2: Space Computing Infrastructure Market Space (Long-Term Bull Case)

Assumptions: Massive scale drives prices down significantly, approaching terrestrial utility-scale PV pricing but with premium for space-hardening. This scenario assumes successful deployment of orbital data centers by 2030-2035.

2. Technology Comparison Matrix

Table 3: Comparative Analysis of Space PV Technologies

Source: Dongwu Securities Research Institute, NREL, Company Data

3. Regulatory and Strategic Context

• ITU "Use it or Lose it" Rules: The urgency to launch is not merely commercial but regulatory. Failure to meet ITU milestones results in the loss of prized orbital slots and frequency bands. This creates a inelastic demand curve for satellite manufacturing in the short-to-medium term (2025-2030).
• National Security Imperatives: Both the US and China view space infrastructure as critical national security assets. This ensures sustained government support, subsidies, and procurement for domestic supply chains, de-risking revenue for local manufacturers like those in China’s "Guowang" (GW) and "G60" programs.

Company Analysis & Investment Recommendations

We identify three tiers of investment opportunities:
1. Technology Leaders: Companies actively deploying Perovskite/Tandem tech for space.
2. Established Suppliers: Incumbents in GaAs and HJT with proven flight heritage.
3. Equipment Enablers: Providers of the manufacturing tools required for next-gen cell production.

1. Junda Shares (002865.SZ) – Top Pick

Rating: Buy | Target Price: Based on 2026E PE of 24x | Market Cap: RMB 15.4 Billion

• Investment Logic: Junda is transitioning from a terrestrial N-type TOPCon leader to a space energy pioneer. In December 2025, it announced a strategic equity partnership with Shangyi Optoelectronics, a spin-off with deep ties to the Shanghai Institute of Optics and Fine Mechanics (SIOM), CAS. This move provides Junda with immediate access to proprietary space-grade perovskite technology.
• Technological Edge:
  • Tandem Breakthrough: Junda’s lab efficiency for Perovskite-Silicon tandem cells has reached 32.08%.
  • Industrialization: The first industrial-grade N-Type + Perovskite tandem cell rolled off the line in November 2025. Mass production lines are scheduled for completion in H1 2026.
• Financial Outlook: After a transitional period in 2025 (estimated net loss of RMB 500 million due to R&D and capacity ramp-up), profits are projected to rebound to RMB 700 million in 2026 and RMB 1.3 billion in 2027. The space segment offers significantly higher margins than terrestrial PV, driving multiple expansion.

2. Mingyang Smart Energy (601615.SH) – Top Pick

Rating: Buy | Target Price: Based on 2026E PE of 14x | Market Cap: RMB 33.3 Billion

• Investment Logic: Mingyang employs a dual-subsidiary strategy to cover both current and future space power needs.
  • Zhongshan Dehua Chip (GaAs): Focuses on immediate commercial satellite markets. Its fully flexible GaAs solar arrays have achieved an on-orbit efficiency of 33.5%, among the highest in the industry. These products are already supplying China’s "Guowang" test satellites. The company controls the entire supply chain from epitaxy to module assembly, offering cost advantages.
  • Mingyang Film Technology (Perovskite): Focuses on long-term disruption. It has built a pilot line for perovskite/silicon tandem cells, achieving a certified module efficiency of 22.41% (lab record 31.12%). It is actively solving stability issues for space environments.
• Financial Outlook: Expected net profit of RMB 1.2 billion in 2025, growing to RMB 2.4 billion in 2026. The wind energy backbone provides cash flow stability while the space division offers high-growth optionality.

3. Oriental Rise Holdings (300118.SZ) – Accumulate

Rating: Accumulate | Market Cap: RMB 16.5 Billion

• Investment Logic: Oriental Rise leverages its leadership in Heterojunction (HJT) technology to create space-specific solutions.
  • HJT for Space: Its 50μm ultra-thin P-type HJT cells are lightweight, radiation-resistant, and compatible with flexible substrates. These cells reduce weight by >60% compared to PERC, making them ideal for satellites.
  • Perovskite Tandem: The symmetric structure and low-temperature process of HJT make it the ideal bottom cell for perovskite tandems. The company achieved a certified tandem efficiency of 30.99% and plans to launch 850W+ tandem modules by 2027.
• Risk/Reward: While facing near-term profitability challenges (2025E loss), the technological moat in HJT and tandem cells positions it well for the 2026-2027 recovery cycle.

4. Shanghai Gangwan (605598.SH) – Speculative Buy

Rating: Speculative Buy | Market Cap: RMB 16.1 Billion

• Investment Logic: A civil engineering firm successfully pivoting to aerospace via its subsidiary Shanghai Fuxi Xinkong (80% owned).
  • Proven Track Record: Fuxi Xinkong has supplied power systems for 18 satellites, with 49 power systems currently operating in orbit.
  • Recent Milestones: In May 2025, its solar arrays flew on the "Xiguang No. 02" satellite. In September 2025, it provided the energy and telemetry system for the "Queqiao Xian" mission. Its perovskite battery on the "Juntian No. 03" satellite has operated normally for one year as of Nov 2025, validating its stability claims.
• Valuation: Trading at high multiples (87x 2026E PE) reflecting its small base and high growth potential. Suitable for risk-tolerant investors seeking pure-play exposure to commercial space power.

5. Equipment Suppliers: Maxwell Technologies (300751.SZ) & Others

Rating: Accumulate

• Maxwell Technologies (300751.SZ): The leader in HJT equipment. It has expanded into perovskite tandem equipment, securing its first commercial whole-line order for Perovskite/HJT tandem cells. Key equipment includes inkjet printing, vacuum drying, and evaporation machines. As space PV shifts to tandems, Maxwell’s tooling becomes critical.
• JieJia WeiChuang (300724.SZ) & Jingshan Light Machine (000821.SZ): Also providing essential processing equipment for high-efficiency cells. Jingshan has strong exposure to perovskite lamination and automation.

6. Other Notable Mentions

• Chaozhou Three-Circle (Group) / Qianzhao Optoelectronics: A core supplier of GaAs epitaxial wafers, holding the #1 market share in China. Direct beneficiary of the continued use of GaAs in high-end constellations.
• GCL Tech (3800.HK): Investing in upstream materials and potentially perovskite applications.
• Goldwind (002202.SZ): Indirect exposure through equity stakes in commercial aerospace firms.
• Shuangliang Eco-Energy (300842.SZ): Supplier of high-efficiency heat exchangers, relevant for thermal management in high-power satellites and ground-based manufacturing.

Risks / Headwinds

While the outlook for space photovoltaics is robust, investors must consider the following risks:

1. Commercial Aerospace Execution Risk:

   • Launch Delays: The timeline for mega-constellations is aggressive. Any technical failures in new heavy-lift rockets (e.g., Starship, Long March 9/10 variants) or regulatory bottlenecks could delay satellite deployments, pushing back revenue recognition for PV suppliers.
   • Standardization Uncertainty: Technical standards for space PV are not yet fully unified. A shift in preferred architecture (e.g., a sudden move away from tandems back to pure GaAs due to reliability issues) could strand investments in specific manufacturing lines.

2. Perovskite Technology Maturity:

   • Stability & Lifetime: While lab results are promising, the long-term durability of perovskite cells in the harsh space environment (atomic oxygen, UV, thermal cycling) is not yet fully proven at scale. If failure rates exceed expectations, adoption could stall, forcing a reversion to expensive GaAs or heavy Si.
   • Efficiency Gap: If the efficiency gap between commercial perovskite tandems and mature GaAs does not narrow sufficiently, the economic case for switching may weaken for high-value missions.

3. Market Adoption & Volume Risks:

   • Terrestrial Dependency: Many perovskite manufacturers rely on initial terrestrial markets (BIPV, CIPV) to scale production and lower costs before entering space. If terrestrial adoption is slower than expected, the cost reductions needed for competitive space PV may not materialize.
   • Geopolitical Fragmentation: Trade restrictions or decoupling between US and Chinese space sectors could fragment the supply chain, limiting the total addressable market for individual companies and increasing duplication of R&D costs.

4. Valuation Volatility:

   • Many of the recommended stocks, particularly those with significant "space concept" exposure (e.g., Shanghai Gangwan), trade at high forward multiples. These valuations price in perfect execution. Any miss in earnings or delays in product qualification could lead to significant multiple compression.

Rating / Sector Outlook

Sector Outlook: Overweight

We maintain an Overweight rating on the Space Photovoltaics sub-sector within the broader Renewable Energy and Aerospace industries. The structural drivers—launch cost deflation, spectrum scarcity, and the emergence of space computing—are secular and multi-year trends. The transition from GaAs to Perovskite/Tandem technologies represents a classic "S-curve" adoption opportunity, where early movers who solve the stability challenge will capture disproportionate value.

Investment Strategy:
* Core Holdings: Allocate to Junda Shares and Mingyang Smart Energy for balanced exposure to both current GaAs/HJT revenues and future Perovskite upside.
* Satellite/Alpha Plays: Consider Shanghai Gangwan for high-beta exposure to verified space flight heritage in perovskites.
* Equipment Picks: Maxwell Technologies offers a safer way to play the technology transition, as it sells the "shovels" (equipment) regardless of which cell manufacturer wins the final market share battle.

Investment View: Detailed Financials & Valuation

The following table summarizes our financial estimates and valuation metrics for the key covered companies as of January 5, 2026.

Table 4: Valuation Table for Space PV Industry Leaders

Note: PE ratios for loss-making years (2025E for Junda/Oriental Rise/GCL) are marked as N/A. Valuations are based on closing prices as of Jan 5, 2026. Exchange rate assumptions: 1 USD ≈ 7.2 RMB.

Deep Dive: Why Junda Shares is Our Top Pick

Junda Shares presents the most compelling risk-reward profile for several reasons:
1. Timing: The company is entering the space market just as the industry transitions from pure GaAs to Tandem technologies. Its partnership with Shangyi Optoelectronics allows it to leapfrog years of internal R&D.
2. Manufacturing Scale: Unlike pure startups, Junda has existing large-scale manufacturing expertise in N-type cells. This operational excellence can be leveraged to scale perovskite tandem production faster than competitors.
3. Valuation Reset: The stock has priced in the 2025 losses associated with the transition. The 2026E PE of 24x is reasonable for a company with projected >80% earnings growth (from 0.7B to 1.3B) and exposure to a high-growth thematic sector.

Deep Dive: Mingyang Smart Energy’s Hidden Gem

Mingyang is often viewed solely as a wind turbine manufacturer. However, its space division is undervalued by the market:
1. Revenue Visibility: Zhongshan Dehua already has revenue from satellite contracts, providing immediate cash flow unlike pure R&D plays.
2. Tech Diversification: By holding both GaAs (current cash cow) and Perovskite (future growth) assets, Mingyang hedges its technology risk. If Perovskite adoption is slower than expected, GaAs continues to perform. If Perovskite takes off, Mingyang is positioned to lead.
3. Conglomerate Discount Opportunity: The market often applies a conglomerate discount to Mingyang. As the space business scales and becomes a distinct reporting segment, a re-rating could occur, unlocking significant upside.

Appendix: Technical & Market Context

A. The Physics of Space PV: Why Efficiency Matters More Than Cost (Initially)

In terrestrial PV, the Levelized Cost of Energy (LCOE) is the primary metric. In space, the primary metric is Specific Power (W/kg) and Reliability.
* Launch Cost Sensitivity: Even with SpaceX’s low costs, launching 1 kg to LEO costs ~$1,500. A solar panel that is 50% lighter but 20% more expensive can still result in net savings for the satellite operator when total system costs (launch + bus + payload) are considered.
* Area Constraints: Satellites have limited surface area. Higher efficiency means more power can be generated from the same footprint, allowing for larger payloads (communications antennas, compute chips) rather than just bigger solar wings.

B. The Role of Encapsulation

A critical, often overlooked aspect of space PV is encapsulation. Terrestrial glass-backsheet modules are too heavy and fragile. Space modules use:
* Polyimide (PI) Films: Lightweight, flexible, and thermally stable.
* Atomic Oxygen (AO) Protection: In LEO, AO erodes organic materials. Special coatings (e.g., SiO2, Al2O3) are required.
* Interconnects: Must withstand thousands of thermal cycles without fatigue failure.

Companies like Shanghai Gangwan and Mingyang have developed proprietary encapsulation techniques that are as valuable as the cell technology itself.

C. Global Competitive Landscape

China is uniquely positioned to lead in Perovskite Space PV due to its dominance in the terrestrial perovskite supply chain and aggressive state-backed space deployment schedules.

Conclusion

The era of "Space Solar" is no longer a futuristic concept but a present-day industrial reality. The convergence of cheap launch, massive constellation deployment, and the dawn of space computing has created a structural demand shock for high-performance photovoltaics. While Gallium Arsenide remains the incumbent, the economics of scale favor the emergence of Perovskite and Tandem technologies.

Investors should look beyond the hype and focus on companies with verified flight heritage, scalable manufacturing capabilities, and proprietary technology in stabilization and encapsulation. Junda Shares and Mingyang Smart Energy stand out as the most robust proxies for this theme, offering a blend of near-term financial stability and long-term exponential growth potential. The sky is no longer the limit; it is the market.

Disclaimer: This report is prepared by Dongwu Securities Research Institute. The information contained herein is believed to be reliable but is not guaranteed as to accuracy or completeness. This report is for institutional investors only and does not constitute an offer to sell or a solicitation of an offer to buy any securities. Past performance is not indicative of future results. Investors should conduct their own independent research and consult with financial advisors before making investment decisions.