China's top solar-panel makers are returning to profitability following two years of losses, after surging Asian demand drove up margins in the second quarter.

Yingli Green Energy, the largest panel company, reported gross margin of 11.8 per cent in the second quarter, up from 4.6 per cent a year earlier, according to a statement yesterday. JinkoSolar already is profitable after its margins doubled to 17.7 per cent. Trina Solar's gross margin rose to 11.6 per cent and the company expects to be profitable in the fourth quarter.

The panel makers are benefiting from increasing demand in China and Japan, which are set to become the top two markets this year. They're turning out panels at top speed and shipping at record levels, in contrast to the past two years when a global glut drove down prices, eating into margins and profits.

The second-quarter results mark “the turning point for the PV module industry and a return to profitability,” Stefan de Haan, a solar analyst for IHS said in an email. “'The positive Q2 announcements from several PV manufacturers did not come as a big surprise given the accelerated growth they have been seeing in markets such as Japan, China and the U.S., coupled with stabilising pricing."

Asian demand is driving the turnaround. China and Japan may each deploy more than 9 gigawatts of photovoltaic panels. Global installations may reach a record 37 gigawatts this year, up more than 20 per cent from 2012, according to Bloomberg New Energy Finance.