The articles Bankruptcies start to plague Chinese Solar and China’s solar PV sector faces uncertainty, suggest that even with the recent commitments from the likes of China’s leaders and from President elect Obama are not enough to insulate the solar industry.
China Jianyin Investment Securities analyst Xiong Lin said a number of small producers of modules in East China’s Jiangsu Province have already filed for bankruptcy because of the tightened credit market and fewer orders.
There has been a lot of discussion about the fact that many investors and buyers have walked away because the price of oil and energy have droped off the map very fast, and indeed it is very interesting to hear that panel shipments are off.
however, in reviewing these articles, there are a few things that should be pointed out:
1) The firms experiencing the greatest pain are the smallest and presumably the most inefficient
2) There was already a lot of chatter about the high number of solar suppliers in the market, and the fact that a shae out was needed
3) The firms have collapsed relatively quickly following the credit crisis hitting the international stage, which suggests to me that their cash positions were very poor and they were probably over extended
4) It does not appear that the large players are having financial issues that wudl jeopardize their positions or ongoing concerns
5) As the smaller players exit the market, the larger firms bring their silicon bases online, and the larger firms continue to innovated, the market penetrations of the larger firms will grow.
Issues that the Seeking Alpha article Suntech Power: Now a Takeover Target address:
According to Suntech CEO Dr. Zhengrong Shi, the company is dedicated to reducing the cost of solar electricity to grid parity through increasing economies of scale, improving efficient utilization of raw materials such as silicon, and developing more advanced technology and new applications. While no solar company has achieved grid parity, Suntech is leading the way.