« Back to Home Page

Solar Industry Suffers Tough Week With Two Major Bankruptcies

Leon Kaye | Monday April 9th, 2012 | 1 Comment

solar, solar industry, clean industry, q-cells, solar trust, solar millennium, solar trust of america, green manufacturing, Leon KayeThe solar industry hit another rough patch last week as two major solar companies, Solar Trust of America and Q-Cells, filed for bankruptcy. The combination of reduced subsidies for solar projects and cheaper Asian imports hit these companies that at one time were applauded for their very ambitious plans.

As the fallout from the Solyndra bankruptcy controversy still ricochets in and beyond Washington, opponents of the clean energy industry will use the examples of Q-Cells and Solar Trust to prop up their arguments that solar is a bum deal for the economy and taxpayers.

Solar Trust sought bankruptcy protection on April 2 after its majority owner, Solar Millennium, started insolvency proceedings in Germany. Solar Trust had planned to build the 1000 megawatt Blythe Solar Power Project 220 miles east of Los Angeles. Last year the firm had been awarded a conditional $2.1 billion loan guarantee from the Department of Energy, but months later ended up not signing for the loan. After Solar Millennium filed for bankruptcy protection, Solar Trust had lost most of its liquidity. Germany, long a global leader in solar development, has watched the solar industry suffer after it slashed its feed-in tariff rates. German taxpayers had long supported the industry with $130 billion in subsidies, but between fiscal austerity and cheaper Chinese imports, the immediate outlook for German solar firms looks grim.

Another German firm to suffer was Q-Cells, once the world’s largest solar cell manufacturer. After losing over $1 billion last year the company filed for bankruptcy in Berlin. For years a headliner at just about every clean energy trade show, the company fell into decline after its peak in 2008. The global fiscal crisis and then the sharp price decline in solar panels pushed the company from its number one ranking to number four in 2010, and last year it did not make the world’s top ten list.

That list is now dominated by Chinese and Taiwanese companies who have the advantages of lower manufacturing costs and scale. Despite the solar industry’s struggles, Chinese companies like Suntech Power Holdings are still bullish about their prospects. And so catcalls of solar’s early demise are still too early to shout. Rising fossil fuel costs will still push innovation in the private sector and governments to sort out how they can score increasing energy independence. What is ironic, however, is that advocates for solar energy had touted its benefits by pointing out the possibility of green manufacturing jobs locally. That is wishful thinking now, however; solar is not that different from other industries which now rely on cheaper and more cost-effective products from abroad so they can compete at home. Meanwhile, view the Blythe Solar Power Project as that foreclosed home in your neighborhood: someone will snap it up and churn it into a profitable investment soon.

Leon Kaye, based in California and who has recently returned from the Middle East, is a sustainability consultant and the editor of GreenGoPost.com. He also contributes to Guardian Sustainable Business. You can follow him on Twitter.

Photo of Panasonic solar panel courtesy Leon Kaye.


▼▼▼      1 Comment     ▼▼▼

Newsletter Signup

Comments

  1. April 09, 2012 at 12:32 pm PDT | Bernard the green jobs guru writes:

    It’s too bad these companies are closing down, especially for the Blythe Solar Power Project. But as you say someone will snatch it for pennies on the dollar.
    The silver lining of cheap solar panels from China is that they become much more affordable to US home owners, and the solar panels sellers and installers in the US are growing like weeds and hiring a lot. That’s the case for Solar City, REC Solar, SunEdison who have been in The Green JOb Bank’s top 50 list for a long time.

    Reply Or REGISTER HERE if you are new.

Leave a Reply

  1. Please leave an intelligent comment. You are welcomed to link to your company or website, but entirely self promotional posts will be marked as spam.
There are 3 ways to comment on 3P

2. Facebook Users

Login to your Facebook account

3. Members

Register for an account or login.

Subscribe to Comments