Solar Industry Suffers Tough Week With Two Major Bankruptcies
The 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. Published earlier today on Triple Pundit. Photo of Panasonic solar panel courtesy Leon Kaye.