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Stormy weather for solar firms
Chinese rivals spur energy firms to file Chapter 11
In terms of public image, the solar industry isn’t having much fun in the sun lately.
Once popular companies such as Solyndra and Solar Trust of America are just two of many solar firms from around the world that have fallen into bankruptcy in a tough environment of increasing competition from cheaper Chinese firms and several cutbacks in subsidies by European governments.
Besides having become a punch line in Republican presidential debates as proof that “green energy” is just government-backed crony capitalism, the Solyndra debacle set up another blow to the industry’s image Wednesday in the form of a government internal watchdog’s report.
The Treasury Department’s inspector general concluded that financial reviewers weren’t consulted on Solyndra’s half-billion-dollar loan until after the Energy Department had decided to approve it. Treasury officials only got “about a day” even to give the review it could, the IG said.
In addition, Solar Trust, which is involved in a huge solar project being touted by the Obama administration, filed for bankruptcy earlier this week, listing assets of just $10 million compared with debts of $100 million.
But solar-industry leaders say their business is not in trouble and insist that these recent woes are just a young industry going through its inevitable series of growing pains.
“It’s kind of ironic,” said Bob Gibson, vice president of market intelligence at the Solar Electric Power Association, “because solar is actually growing very quickly despite these troubles. It’s not on the brink of collapse. You have to distinguish between the industry as a whole and individual companies like Solyndra. The industry as a whole is going to survive and get stronger.”
Dave Buemi, who leads federal business development at Suniva, agreed. He said the global solar industry is growing near a rate of 40 percent each year in terms of the number of installation projects, and it likely will become a $100 billion industry in the next few years.
“The industry’s not in danger of going under,” he said. “The industry’s very healthy.”
Mr. Buemi added that the solar industry accounts for 120,000 U.S. jobs and is “actually an industry that’s added jobs while other industries in the U.S. have not.”
Germany got the ball rolling some years ago with massive subsidies to encourage the adoption of solar energy and since has become the world’s biggest market for solar products. But such German companies as Q Cells, Solon SE and Solar Millennium have gone bankrupt within the past year, and starting April 1, Germany cut solar subsidies by about 25 percent, which analysts estimate could slow down annual installations by 50 percent.
Other European countries such as Britain, Italy, and France have done the same thing, as the debt-ravaged continent has to slash back government subsidies for nearly everything.
As a result, energy analysts say, the industry’s salad days may be over.
“It’s very likely the industry is going to go through a phase of consolidation. The bankruptcies we have seen are not the end, but the start,” Eric Peeters, vice president of Dow Corning in Europe, told Reuters news agency after the Solyndra bankruptcy and the collapse of Massachusetts firm Evergreen Solar.
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About the Author
Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at email@example.com.
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