Free Newsletters - Space - Defense - Environment - Energy - Solar - Nuclear
..
. Solar Energy News .




SOLAR DAILY
The Rise and Fall of Suntech
by Staff Writers
El Segundo CA (SPX) Mar 27, 2013


In the short term, Suntech's potential insolvency strengthens the position of other leading suppliers. However, looking further out Chinese-based banks may be reluctant to provide funding for other Chinese

Suntech Power's epic plunge from solar module dominance to bankruptcy comes as the result of misplaced investments, a misguided pricing strategy, antidumping action in the United States and a potential new willingness by the Chinese government and banking system to cast off detrimental manufacturers, according to the IHS Solar service at information and analytics provider IHS.

China's Suntech on Wednesday said its main operating subsidiary, Wuxi Suntech, had been pushed into bankruptcy by eight Chinese banks. This represents a major fall from grace for Suntech, which as recently as 2011 was the world's largest supplier of photovoltaic (PV) solar modules, as presented in the attached table.

"The seeds of Suntech's fall were planted during its rise to market leadership," said Mike Sheppard, senior PV analyst with IHS.

"In 2009, at a time when the solar market was reeling from bloated inventories and cash-flow concerns, Suntech was one of the few companies willing to brave the uncertain business conditions and invest aggressively in manufacturing capacity. This bold strategy resulted in Suntech becoming the world's largest PV module supplier in 2011. However, in retrospect, the company failed to invest in all the correct areas, specifically in wafer manufacturing. By failing to vertically integrate in this fashion, Suntech was caught in a cost squeeze between falling system, module, and cell pricing and steady wafer expenses-making the company uncompetitive."

From premium to discount
Suntech worked hard to earn its price premium status. As the first Chinese company to do so in the PV market, it was considered at the same level at top-tier U.S., European and Japanese producers. Turbulence began to occur for the company in 2012 with the U.S. antidumping trade case, led by SolarWorld, gaining traction against Chinese producers. Investors in the United States afraid of retroactive elements of the antidumping action avoided Chinese modules in their installations.

This had the most negative impact on Suntech, which was the No. 1 module supplier in the U.S. market with 600 megawatts worth of shipments during the year.

Compounding this issue were financial concerns over the global solar fund, which is still being investigated for alleged illegal activities. The net effect of these two events hurt the company, significantly eroding the price premium earned by the company. By the time news from internal power struggles and the exit of Dr. Shi Zhengrong, Suntech president and CEO, had come to light, it was too late for a company so laden with debt.

Sacrificial pawn
"This potential insolvency is an indication that China's central government may no longer be willing to support any manufacturer in any condition anymore," said Stefan de Haan, principal PV analyst with IHS.

"A little bloodletting may help soften the trade case in the EU. And with a major player folding, China can demonstrate it is not fully supporting these companies anymore. This means that the consolidation in the PV industry will continue, since there are still many hundreds of suppliers and there is still a fundamental overcapacity in the market."

PV growth to continue
In the short term, Suntech's potential insolvency strengthens the position of other leading suppliers. However, looking further out Chinese-based banks may be reluctant to provide funding for other Chinese

Even so, IHS Solar does not expect an immediate shift in the supply and demand balance. Although consolidation among suppliers will continue, a turnaround in the PV industry is expected to occur this year in light of growing end markets, stabilizing prices and revenues, and positive single-digit margins for best-in-class manufacturers.

.


Related Links
IHS
All About Solar Energy at SolarDaily.com






Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks
del.icio.usdel.icio.us DiggDigg RedditReddit GoogleGoogle




Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News





SOLAR DAILY
China warns on EU solar probe
Beijing (UPI) Mar 26, 2013
China has warned the European Union against imposing tariffs on Chinese solar products. "If the EU insists on imposing duty orders on Chinese exports and severely hurts the interests of Chinese manufacturers, the Chinese government will not stand by. We have no choice but take any measure to protect the lawful rights of Chinese businesses," Chong Quan, deputy international trade represe ... read more


SOLAR DAILY
Peach genome offers insights into breeding strategies for biofuels crops

Microalgae could be a profitable source of biodiesel

Researchers building stronger, greener concrete with biofuel byproducts

Biobatteries catch breath

SOLAR DAILY
Robots joining China businesses, factories

Technique could help designers predict how legged robots will move on granular surfaces

Digital 'talking head' speaks for computer

Google buys machine learning startup

SOLAR DAILY
Using fluctuating wind power

France publishes 1GW offshore wind tenders

Davey lauds, warns Scotland on renewables

Uruguay deal boosts S. America wind power

SOLAR DAILY
Japan venture to bring electric tuk-tuks to Asia

China car maker BYD reports profit plunge

Man creates car that runs on liquid air

Greener cars could slash US pollution by 2050: study

SOLAR DAILY
Hybrid ribbons a gift for powerful batteries

Iraq to auction gas exploration blocks: ministry

5.7 quake tied to wastewater injection

Greenhouse gas may be fuel source

SOLAR DAILY
AREVA and EDF bring together Saudi industry to support energy projects

Temelin, a Czech village overshadowed by disputed nuclear plant

British bad weather kills one, closes nuclear site

Cooling systems restored at Fukushima reactors: TEPCO

SOLAR DAILY
Philippine clean energy tariffs to start next year: govt

IMF urges countries to cut energy subsidies

Philippines turns trash into clean energy windfall

Chinese leader Xi, Putin agree key energy deals

SOLAR DAILY
Decreased Water Flow May be Trade-off for More Productive Forest

Middle ground between unlogged forest and intensively managed lands

Hunting for meat impacts on rainforest

Disney invests in Peru to prevent deforestation




The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement