Solar cell industry in free fall
Crashing prices for solar energy products are pushing most world manufacturers to the brink of destruction, and stiff tariffs the United States recently imposed on China are not reversing the trend.
Low prices for solar cells — used to assemble the panels — are a windfall for installers and consumers, but global manufacturers are calling foul as the price for the cells has fallen 66 percent since third quarter 2010. And Boston-based analyst firm GTM Research said it does not expect to see solar product prices increase anytime soon because of a worldwide glut.
The problem is not limited to the United States, where 13 to 20 firms drastically cut operations or went bankrupt, including the controversial Solyndra collapse with government-guaranteed loans. The impact extends to Germany, Australia, India and even China, experts say.
Jigar Shah, an entrepreneur who put together a coalition of Chinese solar companies and American distributors and installers to fight U.S. tariffs, said all major Chinese solar companies expect economic difficulties because of overproduction.
“Everything's crashing right now,” Shah told the Tribune-Review. “The Chinese are maybe overplaying their hand.”
Shah said he would not be surprised if South Korean firms, which have bided their time and spent carefully in the tight solar market, swoop in to buy the solar assets of failing companies at fire-sale prices.
Two American subsidiaries of South Korean firms, Nexolon America and OCI Solar Power, announced plans on Monday for a $1 billion construction investment in Texas that would produce 800 jobs and include a $100 million solar manufacturing facility and North American headquarters in San Antonio. OCI would build five solar power plants across Texas and sell power to municipal utilities.
South Korea's recent success is the exception in the global solar industry, Shah and other experts say.
LDK Solar, a Chinese firm with a Cayman Islands corporate address, stayed alive only by a short-term infusion of money from its native province. One of the world's largest solar firms, LDK lost more than $600 million last year — more than U.S. taxpayers lost on the entire Solyndra debacle.
LDK has more than $2 billion in short-term debt and has only $244 million in the bank, according to government filings.
SolarWorld Industries America Inc., the Oregon subsidiary of a German company that spearheaded the U.S. tariff complaint, claims the Chinese companies in Shah's coalition are the real masters of chaos.
“The Chinese big-footed the entire world,” said SolarWorld corporate spokesman Ben Santarris. “They're like the schoolyard bully.”
SolarWorld and its supporters believe that when China has driven other manufacturers from the field, prices will rise and only China will benefit, Santarris said.
In imposing tariffs on Chinese solar cell manufacturers of 31 percent to 250 percent in May, the Commerce Department agreed with SolarWorld that various governmental entities in China improperly provided money to prop up indigenous companies.
On Thursday, SolarWorld upped the ante by seeking European Union tariffs against Chinese solar companies, prompting threats of retaliation from Chinese officials.
While that debate rages, companies are going broke.
U.S. casualties in the past two months include Amonix Inc. in Nevada and Abound Solar in Colorado. Both companies received aid from the government: Amonix under President George W. Bush and Abound under President Obama.
In Germany, Centrotherm Photovoltaics AG filed for bankruptcy protection, and Schott Solar, whose origins in 1958 make it one of the world's oldest solar companies, said it would close most operations, including one in New Mexico. That state spent $16 million to help Schott locate a manufacturing plant there.
Schott, in a letter to customers, cited “ongoing extraordinary pricing pressure, especially from non-free market economies,” among reasons for the decision.
Of those who view him as a bad guy in the global solar products battle, Shah, the leader of the anti-tariff coalition, said: “I don't care.”
In 2009, Shah sold SunEdison, a solar company he built in 2003, for $200 million. Over the years, he has been called a visionary and an iconoclast.
He said the United States decided two decades ago to let solar manufacturing go wherever in the world it wanted. Now American manufacturing is left with a viable automobile industry with a robust supply chain and little else, he said.
“You can't blame China for our problems,” Shah said.
Lou Kilzer is a staff writer forTrib Total Media. He can be reached at412-380-5628 or email@example.com.
Subscribe today! Click here for our subscription offers.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- ‘Early Mona Lisa’ painting traced to English noble
- Kurds bring fight to Islamic State in contested Iraqi town
- Arrests made in Pakistan school massacre
- Nigeria’s Islamic terrorist Boko Haram group poses threat to Cameroon
- Pakistan fervent about anti-blasphemy law
- Bad day for Israel: U.N. criticizes West Bank settlements; Hamas off EU terror list
- Police end Sydney hostage siege after 16 hours
- Taliban siege at Pakistani school ends with 141 dead
- Hope for better days in Pakistan shattered in school attack
- 2 decades on, Serbs held in Muslim deaths
- 2 ISIS leaders dead in airstrikes, U.S. says