Results 1 to 6 of 6

Thread: Solar Glut Survives Suntech as Customers Seek Alternative

  1. #1
    All League
    Join Date
    Jan 2006
    Location
    East of the Jordan, West of the Rock of Gibraltar
    Posts
    4,779
    Post Thanks / Like

    Solar Glut Survives Suntech as Customers Seek Alternative

    http://www.bloomberg.com/news/2013-0...ternative.html

    China's dubious business practices appear to be biting them in their own arse

    What I find interesting is China shipped and installed 30 gigawatts of solar panels last year. I believe that is equivalent of 30 nuclear reactors.



    Solar Glut Survives Suntech as Customers Seek Alternative

    A day after Suntech Power Holdings (STP) Co. became the solar industry’s biggest corporate failure, workers continued to load and unload trucks at its main factory in China, adding to the global oversupply of panels.

    Seven employees and contractors passing through the gates at the facility in Wuxi, about 75 miles west of Shanghai, when questioned by Bloomberg News said Suntech was operating after this main unit tipped into insolvency. The company, which is seeking local government aid and hired an executive from a state-backed company in Wuxi, said it plans to continue working while a Chinese court restructures $2 billion in debt.

    For the industrial town of Wuxi, preserving some 10,000 jobs at Suntech is a priority of the local government and the state-backed enterprise, Wuxi Guolian Development Co. Ltd. (WUGUOZ) Maintaining the capacity and China’s position as the world’s leading solar supplier will exacerbate a supply glut that dragged down panel prices 69 percent in the past two years.

    “It would be healthy for the market if its capacity would go offline, but that’s probably not going to happen,” said Henning Wicht, lead solar analyst at the energy consultant IHS Inc (IHS). in Munich. “They are a top-tier brand, and it seems the local government will step in.”

    In an e-mailed response to questions, Suntech said it “will continue operations through the restructuring period.” Its spokesman Ryan Ulrich declined to comment to Bloomberg News at the factory gate. Officials at the Wuxi government and the development company weren’t available for comment.

    Controlling Supply

    Flush with credit from government-backed banks, Chinese solar companies wrested control of the solar industry from German and Japanese competitors. Suntech led the world in panel- making capacity in 2010 and 2011 and now ranks fifth worldwide, ceding its lead to Trina Solar Ltd (TSL). and Yingli Green Energy Holding (YGE) Co., according to data compiled by Bloomberg.

    “Wuxi officials would crawl through fire to avoid looking like failures in a technology sector that is so highly prioritized by Beijing,” said Melanie Hart, senior policy analyst at the Center for American Progress in Washington.

    Workers at the Wuxi plant said they hadn’t been told of any changes since March 20, when the company said the unit that operates it was subject to insolvency proceedings initiated by eight Chinese banks. That’s making customers wary, said Arno Harris, president of Sharp Corp (6753).’s U.S. solar-project development unit, Recurrent Energy.

    Customer Concerns

    “For any developer, it’s pretty impossible to put that technology in a project now because lenders are going to want to see a financially stable entity standing behind the warranty,” Harris said in an interview in San Francisco.

    SAG Solarstrom (SAG), a German developer that bought Suntech panels in September, is now looking for other suppliers.

    “We wouldn’t buy Suntech components in the current condition,” said Jutta Lorberg, a spokeswoman for the company, which is based in Freiburg.

    Suntech had module manufacturing capacity of 2.4 gigawatts in 2011, more than quadruple the level of 2007, according to Bloomberg New Energy Finance. China has about 40 gigawatts of capacity, more than the roughly 30 gigawatts installed worldwide last year, the London-based researcher estimates.

    “I don’t see this as an example of consolidation,” said Shyam Mehta, an analyst at GTM Research in Boston. “Once they emerge from this, for most part their capacity will be retained.”

    The Bloomberg Industries Large Solar index tracking 17 companies rose 3.7 percent on March 20 after Suntech’s announcement, its biggest gain in a month.

    ‘Very Negative’

    “The Street assumes that because Suntech went bankrupt its capacity will go offline, and that’s not the case,” said Gordon Johnson, an analyst at Axiom Capital Management Inc. “Insolvency in this case is a takeover by a state-owned entity. This is very negative for the market.”

    Bankruptcy for Suntech’s main unit may wipe out more than $1.28 billion that Wall Street investors funneled into Suntech through two stock offerings, including a $541 million bond issue since 2005. It also had $1.44 billion in credit lines including a $50 million note to the International Financial Corp. and credit lines with the China Development Bank Corp (SDBZ).

    ‘Scrambling’

    “The management and board are scrambling about behind the scenes, but their main concern isn’t the convertible bonds,” said Aaron Chew, an analyst at Maxim Group LLC in New York. “Their bigger problem is the money they owe to the Chinese banks.”

    What happens to the assets and the factories is an open question. The day before it announced the insolvency proceedings, Suntech said it hired Weiping Zhou serve as its president. The executive formerly worked as chairman of Guolian Futures Co., a unit of Wuxi Guolian Development, which is partly owned by the government of Wuxi.

    Wuxi Guolian is a state-owned enterprise that’s funded by the Wuxi city government that makes investments in companies in the area, the sort of entity authorities could use to channel support to Suntech.

    “The consolidation process that people have been expecting is a necessary and healthy process for the industry, but it’s going to take time,” said Rob Stone, an analyst at Cowen & Co. in Boston. “The process of bottoming in the industry won’t necessarily be a one-quarter event.”

    Suntech’s international business hasn’t dried up yet. Its Japan unit, which sells panels in what’s forecast to be one of the top three markets worldwide, said “operations will go on as usual,” according to a statement.

    Fr-Frankensolar GmbH, a German wholesaler of solar products, said it’s purchasing Suntech modules and will continue to do so, Sandra Heinzeller, a company spokeswoman, said by e- mail on March 19.

    “We haven’t heard of any warranty concerns from our customers so far and that’s why there’s currently no reason for concern,” Heinzeller said.



    To contact the reporters on this story: Ehren Goossens in New York at egoossens1@bloomberg.net; Marc Roca in London at mroca6@bloomberg.net

    To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

  2. #2
    Hall Of Fame
    Join Date
    Oct 2011
    Location
    New York
    Posts
    19,546
    Post Thanks / Like
    Solar and wind are not what they are cracked up to be. The process in which the panels and turbines are made is very harmful to the environment, especially the ones made in China.

  3. #3
    All League
    Join Date
    Jan 2006
    Location
    East of the Jordan, West of the Rock of Gibraltar
    Posts
    4,779
    Post Thanks / Like
    Quote Originally Posted by DDNYjets View Post
    Solar and wind are not what they are cracked up to be. The process in which the panels and turbines are made is very harmful to the environment, especially the ones made in China.

    The process of making anything is harmful to the environment. It is a matter of degrees.

    The damage solar and wind power construction does to the environment does not compare to the mess coal fired electric generation makes (See Beijing pollution now & and Pittsburgh circa 1900) and the waste nuclear power plants make last 10’s of thousands of years.

  4. #4
    All League
    Join Date
    Feb 2005
    Posts
    4,874
    Post Thanks / Like
    Wind power is a joke the Government investment is driving tax rates and electric rates thru the roof. It is another Govt piece of expensive junk!

  5. #5
    All League
    Join Date
    Jan 2006
    Location
    East of the Jordan, West of the Rock of Gibraltar
    Posts
    4,779
    Post Thanks / Like
    Quote Originally Posted by MnJetFan View Post
    Wind power is a joke the Government investment is driving tax rates and electric rates thru the roof. It is another Govt piece of expensive junk!
    you got a link to back that up?

  6. #6
    Hall Of Fame
    Join Date
    Oct 2011
    Location
    New York
    Posts
    19,546
    Post Thanks / Like
    The best part about the wind farce is all the money it is costing the places where they are now removing the mills bc of residents complaining about the noise and unsightliness.

Bookmarks

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •  

Follow Us