China's First Solar Listed Company Goes Bankrupt

On December 14, Solon SE, the first solar energy company listed in Germany, announced that due to its failure to reach a friendly agreement with banks and investors, the company has officially filed for bankruptcy. Soon, Solon SE became the first solar energy listed company in Germany to file for bankruptcy. The company is also the first listed photovoltaic manufacturing company in Germany. Due to the weakening demand from Germany and other European countries with the largest demand, photovoltaic companies in China, thousands of miles away, feel the same chill.

A brokerage researcher interviewed by the Securities Times reporter said that although the cost of Chinese companies is slightly lower, but compared with Solon SE, it is nothing but rabbit death. Because everyone faces the same market constraints. According to the researcher's prediction, before the arrival of the second quarter of next year, we can't see the signs of the warming of PV demand. She said: “From the experience of the past few years, the business cycle of this industry has changed more and more frequently, and many companies have peaked. The production line that was launched at the time had not yet been tested, and it was faced with a plunge in product prices. Large companies were not spared and it was increasingly difficult to do so."

Countries such as Germany, Italy, the Czech Republic, and Spain account for about 80% of the world's photovoltaic market demand. Due to the spread of the European economic crisis, governments from all over Europe have continued to reduce subsidies for their photovoltaic industry and demand for photovoltaic products has decreased since 2010. Since 90% of China's photovoltaic products are exported overseas, they are very sensitive to changes in overseas markets. The bleakness of the industry has been reflected in the performance report. In the first half of 2011, China's listed photovoltaic companies in the United States were almost collectively in losses. Among them, Suntech suffered a loss of 260 million U.S. dollars, LDK suffered a loss of 88 million U.S. dollars, Zhongdian Solar lost a total of 17 million U.S. dollars, and Hanwha New Energy lost 11 million U.S. dollars. According to Li Junfeng, deputy director of the Energy Research Institute of the National Development and Reform Commission, China’s total PV production capacity this year will reach 30 GW, while the global installed capacity is only 20 GW this year. Optimistic estimates that there are 10 GW of inventory of PV modules need to be digested.

However, there is still a glimmer of hope in the crisis. For Chinese companies, the accelerated start of the domestic market is expected to digest a significant portion of capacity in the coming years. Zhang Lanying, a researcher at the Samsung Economic Research Institute, believes that the determination of on-grid tariffs for photovoltaic benchmarks has now set off an upsurge in installed capacity in the western region, which has boosted the growth in photovoltaic installed capacity. According to her analysis, this benchmark price is close to the cost of power generation for domestic photovoltaic power plants. The market mechanism for solar photovoltaic applications has begun to take shape, and the implementation of policies has led to more bidding projects and photovoltaic orders. It is estimated that in 2011 China's PV market will exceed 1.6GW, which will increase by more than 230% over 2010.