SOLARPOWER

Solar Industry takes Note; Bankruptcies prove to be a Speed Breaker

Shradha Aswani, Energetica India

The solar industry is here to stay, but like all other mature industries, the global solar sector is experiencing a rough path (bankruptcies) towards its goal of a sustainable industry.

he green economy was supposed to be planets salvation and also help European manufacturing industry gain lost ground in the manufacturing sector against low cost manufacturing economies. But this is not proving to be easy with some solar manufacturing companies closing down recently. Solar manufacturing recently has seen a lot of blood bath due to various reasons dropping solar module prices, reduction in demand due to decrease in Feed in Tariffs and Chinese competition and maybe some role being played by the global financial crisis. Some experts say that in terms of technique it is pretty easy to copy and make these solar products; however with labour as expensive as it is, western economies are definitely no comparison to emerging economies where both land and labour is much cheaper. European economies are still committed to green economy but not at the expense of tax-payers resources. Surprisingly bankruptcies have affected not only solar manufacturing but also solar power project developers. Energetica India visits some bankruptcies announced recently: Q- Cells, Germany The breakdown of Q-Cells almost crashed the German solar market. The finances were low
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and the company was going through a number of cost reduction techniques. However none of it seemed to work out and Q-Cells filed an official request to start bankruptcy proceedings in April 2012. The company had won the 4th place amongst solar manufacturers in the world in 2010 but couldnt make it to the top 10 in 2011.

Abound Solar, USA Abound Solar was a manufacturer of thinfilm cadmium telluride (CdTe) photovoltaic modules. The company had doubled the solar installations in North America during its launch but recently filed a petition for protection under the U.S bankruptcy code. The company was expecting a set back and had even stopped conventional

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Company Stirling Energy Systems Photowatt Solon Energy Conversion Devices Sun Concept Ralos New Energies Scheuten Solar Trust of America Odersun

Country U.S France Germany U.S Germany Germany Netherlands U.S Germany

Primary Business Equipment and Project Developer Solar Panel Maker Solar Panel Maker, Project Developer Solar Panel Maker Project Developer Project Developer Project Developer Solar Panel Maker, Project Developer Solar Panel Maker

Table 1.

production to work on a new product, but sadly a sink in the prices of silicon cells got into the way and ruined the plan. It had spent around 68 million dollars after which the credits (from Department of Energy) had been called off in the month of September 2011. Evergreen Solar, USA The Massachusetts based company (a solar panel manufacturer) filed a petition for bankruptcy in 2011; with a debt of approximately 485 million US dollars. In fact, the conditions forced the company to auction various components, most of which were bided by the investors of the company itself. As a matter of fact, it is known that these investors held about 70 % of the company. Solyndra, USA Solyndra is an USA based Solar panel manufacturer. On August 31, 2011 Solyndra publically announced its plans to file for bankruptcy under law. Apart for a huge effect on the Silicon Valley, 1100 employees were redundant, which had an enormous impact on the overall scenario in the Global solar market. A board meeting held on August 30th confirmed that no more cash would flow into the company by the federal sources which led to the final decision of ceasing operations. Spectrawatt, USA Censuring the present market conditions then, and some operational malfunctions, Spectrawatt filed a petition for bankruptcy in September 2011. Moreover it was also made public by the company that a lot of issues with vendors regarding funds also
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forced them to reach this decision. The company, a solar panel manufacturer, was only 3 years old when it filed for bankruptcy. Sovello, Germany Sovello made silicon wafers and turned them into cells and then panels. It was once a joint venture of Q-Cells, Evergreen Solar and Renewable Energy Corp before beingsold to Ventizz Capital Fund IVin 2010. A degradation in the prices in the market came about which quite unexpectedly happened before the company could lower its costs of production. This contributed to the downfall; and the news of the filing was quite into public by the second week of May 2012. 1250 employees worked in Sovello at that point of time. SolarHybrid, Germany An Arnsberg based company in Germany, filed for insolvency proceedings in March 2012. SolarHybrid was a photovoltaic project developer. As an explanation for this bankruptcy filing, the company claims that it has run out of cash. Earlier the company completed projects of various other US based bankrupt manufacturers. However the company was then unable to arrange capital for the other projects to be built up. Konarka Technologies, USA and Germany The most recent on the list to file for bankruptcy is Konarka Technologies, based in Nuremberg, Germany, who filed for a bankruptcy on 3rd July 2012. The company is a complete subsidiary of Konarka Technologies, Inc. USA. The Konarka group is considered to the market leader

in the production of Organic Photovoltaic Systems (OPV) worldwide, where the Nuremberg branch is responsible for sales in the European region and research. Things were manageable after a while from the market downfall, since the company received products from its parent company. However, considering that the parent company itself is going through bankruptcy proceedings itself, the German subsidiary could not sustain itself for long. However the R&D is still running in the company without hindrances and the company is pretty positive about being able to start product as soon as they find an investor. Some more bad news for the industry included can be seen in table 1. This major disproportion in the solar sector globally had been assumed to leave the market by the end of 2011, but conversely we are seeing that it is pretty well continuing to haunt the industry today as well. It comes across that the Asian market has turned solar panels and modules into a commodity, which hasnt just affected the present but also the future of the American and European manufacturers. However, it is definitely too early to say, whether or not, the emerging producers will continue to dominate the market in the long term. It is not a surprise that Indian solar manufacturers who currently do not account for any major share in the global solar trade, are caught in the game; at a time when they had just entered the market. Meanwhile, Indian Solar Power Developers are still at a very nascent stage to get affected but are enjoying the shift in demand-supply which has decreased solar panel prices considerably.
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