Chinese Manufacturer Cash Troubles Show Deep Solar Glut a Worldwide Issue

It was noted in last week’s edition of new NACM feature “Industries to Watch” that solar producers in the United States were facing issues that included too many players operating in the industry with respect to actual demand. The problems have also been notable in the European Union. Perhaps ironically, the latest solar company in trouble is based in China and was among the key examples of allegations of price dumping and illegal government subsidies that have hurt U.S. and EU-based operations.

Suntech generated the most press about a solar company since the collapse of California-based Solyndra, a firm that garnered millions in U.S. government grants before fraud allegations and financial mismanagement derailed its operations, just before the weekend when it missed its bond payments. Suntech, one of the largest solar manufacturers in the world, has been widely speculated to have experienced a cash crunch likely to spiral into some sort of insolvency-based restructuring in the near future. Such troubles underscore the out-of-balance ratio of solar product manufacturers/service providers and consumers willing to pay for them.

However, the news could actually, in a roundabout way, be helpful for U.S. and EU-based producers. With such a large producer stumbling significantly, that is one more competitor (and an important one) that is potentially out of the saturated pool or at least not in a position to grow market share for a time. Granted, that’s not to say the problems facing solar producers in the U.S. or EU have gone away…far from it.

-Brian Shappell, CBA, NACM staff writer

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