PV bankruptcy or emergence

Solon SE, a German solar technology company, announced that due to its failure to reach a friendly agreement with banks and investors, the company has formally filed for bankruptcy and became the first solar energy company to file for bankruptcy in Germany. Just a few days later, SolarMillennium AG, another solar thermal power generation company in Germany, also announced that it will apply to the German Field Court to initiate bankruptcy proceedings.

It is reported that Solon was the world's top solar panel manufacturer, and in 1998 became the first listed solar energy company in Germany. The company's share price once reached a high of 89 euros during the German photovoltaic industry boom; but in the past year, Solon's stock price suffered a sharp drop of 78.73%. On the same day that bankruptcy broke out, Solon's share price plummeted by 46% to close at 0.502 euros.

In addition to German companies, BPPLC, Europe’s second-largest oil company, had previously decided to close its solar units and decided to fully withdraw from the industry after 40 years of investment. At home, 80% of photovoltaic leading manufacturers have experienced a significant decline in their third quarter results, and share prices have continued to fall. Some companies cut production, suspend production or even close down.

Due to the impact of the global economic oscillation, the deterioration of the European debt crisis and the adjustment of PV subsidy policies by most countries, the development of the photovoltaic industry is grave and the overcapacity is serious. At present, the global solar module production capacity reaches 50GW, but this year global demand is only 24GW, and the average price is 44% lower than a year ago.

With the declining demand from Germany, the largest solar energy application market, German solar manufacturers including Q-Cells SE and Solarworld AG are facing increasingly fierce foreign competition pressure. Previously, due to the loss to Chinese solar energy companies, Solyndra LLC and three other US solar manufacturers have declared bankruptcy.

However, even if some veteran manufacturers have not yet gone into bankruptcy, they have begun to adopt strategies for layoffs and restructuring to cope with the crisis. MEMC, one of the world’s fourth largest semiconductor wafer makers and one of the world’s largest solar energy service providers, announced that it will adopt a series of measures in the fourth quarter of 2011 and the first quarter of 2012, including global layoffs, reduction of production capacity and reduction of costs.

It is worth noting that the company was the same partner that was previously "sold out" of wafer contracts by Suntech Power with a default fee of US$212 million.

According to the latest quarterly report released by the research organization Solarbuzz, global PV demand will increase by 6% in 2012, and the decline in the European market will be offset by a 43% increase in markets outside Europe. The financing difficulties will make solar PV companies shift their focus from pursuing market share to profit recovery. In the next five years, the ex-factory prices of PV modules will drop by 37%-50% compared with 2010 levels.