Tuesday, August 21, 2012

Solar-panel "oversupply"

If you ever needed a reason to condemn Leisure Class bankers and the way they are mismanaging the economy, this example will do.  The planet is in critical need to replace its trillions of fires with solar power.  And yet we see a Chinese company teetering on the brink of collapse because they have "excess" production capacity for a product the planet dearly needs to avoid destruction.  We don't have an oversupply of solar panels, we have an acute undersupply of customers with some money.

Once-Mighty Suntech Struggles to Survive

The Chinese solar giant is in deep trouble, but even its collapse wouldn't be enough to stabilize a massively oversupplied market.

MARTIN LAMONICA
Monday, August 20, 2012

The world's largest supplier of solar panels, Suntech Power, based in Wuxi, China, is teetering on the brink of insolvency. The Chinese business icon (see "Solar's Great Leap Forward") will likely survive, but its woes show how it's become nearly impossible for any company to be profitable selling solar panels.

Suntech's founder (and solar industry pioneer) Zhengrong Shi has been replaced as CEO by former chief financial officer David King, a Chinese-American who joined the company last year.

The surprise move is meant to get Suntech's financial house in order after four consecutive unprofitable quarters and a stock price that has fallen more than 50 percent this year. The company has a crushing debt load of over $2.2 billion and says it was a victim of a fraud involving solar projects in Europe that could further damage its balance sheet.

In many ways, Suntech is suffering from the stifling market conditions it helped create. To achieve greater scale, it borrowed heavily and rapidly expanded production to lower solar panel costs and keep pace with competitors (see "The Chinese Solar Machine"). But now, the market is flooded with panels, and the leading Chinese solar manufacturers are overextended financially.

It's created a situation where even the most technically advanced and established companies are operating at a loss. "Even if Suntech were to vanish overnight, it wouldn't have a profound long-term effect on the market," says analyst Nathaniel Bullard at Bloomberg New Energy Finance. "It may spook the others, but it's not enough to address the supply-demand dynamic."

What will happen now to Suntech and other debt-laden Chinese manufacturers is anyone's guess. Suntech could ratchet down expenses to remain independent, or it could combine with another large business. Some sort of debt relief from a government-owned Chinese bank is possible, too, since solar is a strategic industry in China and Suntech is a high-profile company.

But such a move could inflame tensions in the ongoing trade case against Chinese solar manufacturers accused of dumping products and receiving unfair government subsidies (see "Analysis: Chinese Solar Companies Sell Below Cost"). "There's already a backlash and [a debt write-off] will add further scrutiny," says Mark Bachman, an analyst at Avian Securities. more

12 comments:

  1. Your this technique is really great. If it is a conductor then another technique for electrical connection must be used. Alternative Energy Kent

    ReplyDelete
  2. its really sad that markets are flooded with pv panels yet most of the world runs on coal or petroleum. i think technology of production is not yet so cheap. i hope spreading awareness is essential.

    Unirac

    ReplyDelete
  3. It would be nice if people are aware of what solar power technology is all about. I admire companies who promote this kind of technology but consumers are not that informed or educated on how it really helps. It's eco-friendly yet still expensive. In U.S and Australia they go for rebate so that consumers can afford. Just saying. :)

    ReplyDelete
  4. Solar energy can be modified more to increase power output while decreasing the need for surface area. One issue, also, is to lower the price or look for alternative material to lower the cost of solar power production.

    contractor edison

    ReplyDelete
  5. It can be increase countries’ energy security through reliance on an indigenous, inexhaustible and mostly import-independent resource, enhance sustainability, reduce pollution, lower the costs of mitigating climate change, and keep fossil fuel prices lower than otherwise. Renewable Energy Companies

    ReplyDelete
  6. Solar panels take up power from the solar. They can stock up this energy within silicon chambers and produce an adequate quantity of electrical energy to energy a home or company.

    solar panel installers Florida

    ReplyDelete
  7. Now a day's solar is very popular in worldwide for alternate of electricity and now it's capture the total market of alternate use of electricity market for more go to ...free solar quotes

    ReplyDelete
  8. I really appreciate this blog so good and cool at the same time but I'm looking also to the post of solar panel installers gta. Thanks!

    ReplyDelete
  9. Really appreciate you sharing this article post.Thanks Again. Will read on...
    Solar Energy Panels

    ReplyDelete
  10. Nice. If only everyone else tried this. Making things do more with less! Thanks for joining the noble cause to save energy.

    solar water heater systems

    ReplyDelete
  11. It's created a situation where even the most technically advanced and established companies are operating at a loss. - contractor in Edison

    ReplyDelete
  12. Thanks for sharing...
    Surya power is the 2011 to established Company Well qualified team Thousands of systems installed all over india. Surya powers is the wholesale dealer and the supplier of solar pannels.
    VIEW MORE
    SOLAR BATTERIES
    SOLAR WATER HEATER
    SOLAR STREET LIGHT
    Thankyou..

    ReplyDelete