Suntech Bankrupt and Bosch Dropping Out of Solar
Suntech Bankrupt, Bosch cools it on solar.
Another solar manufacturer bites the dust. This time, it’s one of the world’s leading solar manufacturers, Suntech. Suntech the first solar firm to go public back in 2005. The Chinese solar manufacturer was compelled to file for bankruptcy after it was unable to make a payment for $541 million.
Just days after the news of Suntech’s bankruptcy, Bosch, a German auto parts manufacturer, pulled the plug on their solar manufacturing for 2014. Though Bosch Solar CISTech GmbH will continue to produce solar thin-film technology, Bosch’s ingots, wafers, solar cells, and solar panels will no longer be in production.
Last year, Bosch lost one billion euros ($1,282,200,000 US Dollars).
“The drastic changes in the market, particularly the rapid increase in capacity in China, simply couldn’t be foreseen… We are still convinced that photovoltaics will play an important role in the energy mix of the future. However, even we are not capable of sustaining such heavy losses forever,” says Bosch’s director, Dr Volkmar Denner.
Denner explains how the dramatic increase in Chinese manufacturing has created oversupply of solar panels in the market. Chinese manufacturing companies have captured about 80% of the global market for solar manufacturing- due in part to heavy subsidies from the Chinese government.
Some have argued that the recent bankruptcy of Suntech could mean that days of price reductions in the solar industry may be coming to a close.
Low prices have meant that more solar panels have been installed on rooftops in the U.S. – which is good in itself. It’s awesome that solar is cheaper and more accessible than ever, but it’s complicated. I’m not an economist, but even I can see that this seems to be a problematic situation.
U.S. manufacturers have also blamed the Chinese for illegally subsidizing these solar exports and essentially “dumping” solar products in the U.S. below fair market value.
While this hurt U.S. manufacturing, it meant cheaper prices for consumers. Business models with leases and power purchase agreements used these low-cost solar panels on top on U.S. roofs. If those Chinese companies go out of business, who will be left to honor those MegaWatts’ worth of warranties?