The bankruptcy of Suntech Power Holdings, one of China’s (and hence the world’s) largest solar panel manufacturers, might seem like bad news for the solar industry. It’s not. It’s just bad news for Suntech shareholders.
Suntech made a huge mistake, purchasing an 80% stake in Global Solar Fund in 2008. Turns out that was not only a bad investment, Suntech was essetially defrauded. They lost $683 million on the deal and they needed that money to make payments on their debt. When they couldn’t, they had to file for bankruptcy.
So the mighty fall. Suntech was number two in the world in manufacturing as recently as 2011. But does this signify the end of solar? No.
The only impact this will have on the solar industry will be a temporary easing of market conditions for other manufacturers. There’s too much product floating around out there–and until some entreprenurial company buys Suntech’s remaining assets, there will be a little less of a surplus. This means a bit better margin for the rest of the solar universe, which is very much a good thing. Module manufacturers have been skating on thin-ice margins for two years.
Like the flurry of bankruptcies that afflicted Western solar companies over the last year and a half, this is very much normal operations in a young and quickly growing industry sector.
Compassion for Suntech–continued optimism for solar–and back to work, everybody.