The solar panel manufacturing industry has really struggled in recent years as economic pressures have pushed many into financial disaster. After controversial buyouts and subsequent bankruptcy filings of other companies in the past, the industry has left a bitter taste in the mouths of many. In an effort to resolve insolvency, Suntech Power has filed for the Chinese equivalent of bankruptcy protection.
Dimming The Lights
Suntech Power is one of the world’s largest manufacturers of solar panels. Having been a key player in the Chinese government’s efforts to pursue a takeover in renewable energy sources, Suntech has faced numerous challenges to profitability. Manufacturing issues, Western tariffs for Chinese made products, a drop off in the demand for green energy, and the denial of a bailout by the Chinese government have all lead to Suntech’s collapse.
Suntech isn’t the only Chinese solar manufacturer facing financial problems. It is estimated that many companies are operating under debt burdens equivalent to owing $1 for every $3 made in profits. With such poor margins, spiraling into insolvency is inevitable. Last week, Suntech’s biggest creditors asked the court to initiate a reorganization petition.