Suntech bankrupt

Suntech Power Holdings, the China-based maker of solar panels, declared bankruptcy on Wednesday, the state news agency Xinhua said.

On Monday of this week, according to Reuters, Suntech said that it had defaulted on US$541 million of its bonds due on Friday, triggering defaults on loans from the International Finance Corporationand various Chinese lenders.

Industry experts will not be surprised by the latest high profile casualty to be hit by bankruptcy, as oversupply and low prices have crippled the industry.

"PV industry growth has followed a significant, often dramatic, upward trajectory. But unfortunately, revenues have followed an unprofitable path," says Paula Mints, founder, and chief market research analyst at SPV Market Research.

According to research by SPV, the top PV manufacturers have been losing considerable amounts of money: "The manufacturers [in the table below] shipped 58% of total shipments in 2012. Revenues for the manufacturers [in this table] were 65% of total revenues in 2012. But at the same time, the manufacturers [in this table] lost a combined US$2.1-billion last year".

Mints believes that a pricing recovery may not come quickly: "Currently the average price for PV modules is <US$0.70/Wp, with inventory trending significantly lower. High levels of inventory will keep prices down in 2013.
The good news is that deployment of technology will continue at high levels. The bad news is that manufacturer failures will continue. Once the consolidation in the industry is complete, PV module prices will increase".

NB: Paula Mints will be writing about the current predicament in the PV industry in the latest issue of Renewable Energy Focus magazine. The article will contain charts looking at PV Industry growth (2002-2013 estimate) and Regional PV Shipments and Average Selling Prices (2002-2012) For a free signup click here. 

Solar Energy News from Green Energy WA