For the 2.16 billion-yuan photovoltaic contract, central state-owned enterprises would rather pay compensation than sign it, and their collective bid abandonment is rooted in the unviable economic calculations that cannot make financial sense.

Multiple central SOEs have abandoned bids after winning photovoltaic projects at low prices, and the industry's pricing system needs to be restructured.

Energy Foresight recently learned that a 300MW photovoltaic sand control EPC project in Shaya County, Xinjiang, has gone through two rounds of bidding, and both winning bids were subsequently abandoned.

In September 2025, the SIGMA Electric Consortium announced that it was unable to fulfill the contract three months after winning the bid, and the project was invalidated. The project was re-tendered in January this year, and the Hangyang Electric Power Consortium was confirmed as the winner at a price of 2.4897 yuan/W in February. After half a year of negotiations, the consortium also refused to sign the contract and issued a written statement to waive all the rights as the winning bidder.

A contract worth 750 million yuan has no willing contractor for two consecutive times.

Similar scenarios have played out elsewhere. A 640 million yuan distributed photovoltaic project in Bayannur, Inner Mongolia, the consortium led by China Construction Second Engineering Bureau refused to receive the bid notice and sign the contract after winning the bid, and was disqualified in June this year with the guarantee claim initiated.

For the 350MW photovoltaic project in Tacheng, Xinjiang, both China Railway 24th Bureau and CCCC (Tianjin) abandoned the winning bid, with one refusing to sign the contract, and the other not only refusing to sign but also being found to have the intention of illegal subcontracting.

The total contract value of the three projects exceeds 2.1 billion yuan, and all the bidders that abandoned the winning bids are central SOEs or large state-owned enterprises.

They rushed to submit low bids during the tendering process, but regretted it after winning the bid. These enterprises have calculated that the maximum loss caused by abandoning the bid is at the 10 million yuan level, while if they forcefully carry out the project, the loss may far exceed that amount.

01

Winning Bid Twice and Refusing to Sign Twice

No Enterprise Dares to Take the 750 Million Yuan Sand Control Project

Section 1 of the photovoltaic sand control project in Shaya County is a tough nut to crack.

It has a 300MW photovoltaic installed capacity, plus a 220kV step-up substation, 50MW/100MWh energy storage, and an access road of about 20 kilometers. The overall design of the entire project is also coordinated by Section 1. Located in Shaya County, Aksu Prefecture, Xinjiang, on the edge of the desert, the costs of construction conditions, material transportation, and personnel resettlement are completely different from those of ordinary power stations.

The control price for the first round of bidding was 2.65 yuan/W, and the SIGMA Electric Consortium won the bid but failed to fulfill the contract three months later. The re-tendering in January this year canceled the control price to let the market determine the price, and the Hangyang Electric Power Consortium won the bid at 2.4897 yuan/W, which was 6% lower than the price limit of the first round.

The result was the same. The winning bidder refused to promote the contract negotiation, and issued a written statement to waive all the rights of the winning bid. The owner can only disqualify it and explicitly claim for all losses.

At the bidding stage, a quotation of 2.49 yuan/W can be submitted according to the conventional model, but after winning the bid, when the plan is refined, it is found that the cost cannot be covered. This type of project has a long payment recovery period and many uncertain factors. Once constrained by the internal rate of return red line of central SOEs, the project cannot be approved at all.

02

Distributed Photovoltaic Projects Are Also Affected

The Quotation Rate of 81.25% Cannot Cover the Cost

The Bayannur project is a distributed photovoltaic project with completely different difficulties. The sites are numerous and scattered, and it is located in the grassland area, so the costs of transportation, accommodation and labor are much higher than those of centralized power stations.

China Construction Second Engineering Bureau, in cooperation with China Southwest Geotechnical Investigation & Design Institute Co., Ltd., won the bid at a rate of 81.25%, with a total project investment of about 640 million yuan and a construction period of 730 days. This price was competitive during the bid evaluation and was approved by the experts. However, after winning the bid, China Construction Second Engineering Bureau failed to pay the agency service fee as scheduled, refused to receive the bid notice and refused to sign the contract, and still failed to perform the contract after the owner's written reminder.

The pain points of distributed photovoltaic are that the roof sites are scattered, the construction management is difficult; the operation window period in the grassland area is short; the price of modules fluctuates drastically, and from bidding to bid confirmation, it only takes a few weeks, and the cost change is enough to eat up all the profit margins.

In accordance with the Regulations on the Implementation of the Tendering and Bidding Law, the tendering party disqualified its winning bid, did not refund the deposit, and initiated the guarantee claim procedure. Estimated based on 640 million yuan, the amount of the guarantee is between several million yuan and tens of millions of yuan. But compared with the possible losses after entering the site for construction, this cost is controllable.

03

Abandoning the Bid Is a Cost-Effective Choice

Central SOEs do not act regardless of cost. They have a complete risk control system and a strict red line of rate of return.

The direct loss of abandoning the bid can be clearly calculated. The legal upper limit of the bid bond is 800,000 yuan, the guarantee claim ranges from several million yuan to tens of millions of yuan, plus the maximum administrative fine of 1‰, the total loss is at most at the 10 million yuan level. Once the construction starts, the project loss may far exceed this amount. The winning bid price of 330 million yuan for the seventh section of the Tacheng project is very likely to fail to cover the cost under the current market environment.

The invalidation notice of the Tacheng project is more straightforward. The tenderer sent a notice to China Railway 24th Bureau to sign the contract within a time limit, requiring the completion of the contract signing before April 1, but the other party did not respond. CCCC (Tianjin) was even more outrageous. The tenderer could not get in touch with it after many phone calls, and later it was found that it had subcontracted the core construction links to unqualified third parties without permission. Both winning bidders were eventually disqualified, the deposit was not refunded, and the owner reserves the right to recover all losses.

These central SOEs are not unaware of the rules, but after calculating the accounts, they find that abandoning the bid is more cost-effective.

04

The Cost of the Low-Price Era Is Being Recalculated

The general background of this wave of bid abandonment is that the rules of the game in the photovoltaic industry have changed.

In the past, with subsidies and guaranteed electricity prices as the support, enterprises relied on low prices to expand scale, and even with meager profits, they could be covered by policies. Now the grid electricity price is fully market-oriented, the era of guaranteed quantity and guaranteed price is over, and the revenue model needs to be rebuilt.

The drastic fluctuation of module prices turns EPC quotation into a gamble. In July this year, the centralized procurement of 4.3GW modules of China National Nuclear Corporation opened for bidding, six enterprises including Chint New Energy, JA Solar and LONGi were shortlisted, with the quotation range from 0.685 yuan/W to 0.748 yuan/W. For the 5.4GW module centralized procurement of China Resources Power, nearly half of the enterprises quoted a price lower than 0.7 yuan/W. From bidding to bid confirmation, it only takes a few weeks, and the cost change is enough to eat up all the profits.

The second round of bidding for the Shaya County project canceled the unit price control and let the market determine the price. This detail is worth noting, the owner has also realized that the price limit can no longer attract enterprises with real performance capabilities. But even with the price liberalized, the winning bid price is still lower than the price limit of the first round. The market's consensus on the pricing of such projects has been lower than the owner's expectation.

In the future, photovoltaic EPC projects will no longer compete on who offers the lowest price, but on who has more accurate cost calculation, stronger supply chain management and more sufficient risk prediction. When winning a bid at a low price means "losing money as soon as you win the bid", and even central SOEs begin to stop losses by abandoning the bid, the pricing logic of this industry needs to be re-examined. Projects can fail to be awarded, contracts can be left unsigned, but the accounts must be clearly calculated — this is a lesson that central SOEs have taught the market with practical actions.

This article is from the WeChat official account "Energy Foresight", author: WANG Mengjiao, published with authorization from 36Kr.