Three solar firms file for bankruptcy in a week
While environmentalists tout benefits of solar power, three solar companies filed for bankruptcy in the past week.
Each of them blamed intense global competition for its downfall.
The German companies Conergy AG and Gehrlicher Solar AG filed for insolvency in German courts in the past week. The Hawaii-based solar company Hoku also filed for bankruptcy protection, reports Renewable Energy World.
Hoku owes up to $1 billion to creditors and had to cancel building a manufacturing plant in Idaho, which had already been delayed several years.
Conergy’s 800 German workers are now in line to get three months of government unemployment payments.
All three companies partially blamed fierce international competition from places like China, which has flooded the solar market with cheap panels. Additionally, the German government has been cutting down on green subsidies.
The International Business Times notes: “A global glut in supply combined with plunging prices amid stiff competition from Asia has brought down or seriously debilitating some of the biggest names in the sector in the past two years.”
These bankruptcies come amid a trade dispute between the European Union and China over solar subsidies. Europe argues its businesses can’t compete with the cheaper Chinese panels.
The EU even moved to impose anti-dumping duties on Chinese panels last month, but now both sides are trying to negotiate a way out of their trade spat.
In the U.S., the Obama administration also slapped tariffs on Chinese solar panels to protect domestic manufacturers.
American solar panel manufacturers Solyndra and Abound Solar blamed subsidized Chinese competition for their demise. Both companies themselves received generous government-backed loan guarantees — $535 million to Solyndra and about $70 million to Abound Solar.
“With over $30 billion in reported government subsidies, Chinese panel makers were able to sell below cost and put Abound out of business before we were big enough to pose a real competitive threat to China’s rapidly growing market share,” said Craig Witsoe, former CEO of Abound.
A Daily Caller News Foundation investigation revealed that Abound solar was selling faulty solar panels that routinely underperformed and even caught on fire. The company reportedly knew its panels were faulty prior to receiving taxpayer dollars and may have misled investors in order to keep the company afloat until federal aid came in.
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