Suntech Power defaults. Solar troubles reach China.

Suntech Power Holdings, one of the world's largest solar-panel manufacturers, has defaulted on $541 million in bonds. The inability of Suntech Power to make payments on its debt is part of a consolidation of the market's oversupply of cheap solar panels from China.

An employee talks to a visitor at the Suntech booth of a photovoltaic industry exhibition in Beijing. Suntech's default suggests that solar market consolidation is creeping into China, where government subsidies have long muted market realities.

The worldwide glut in solar panels has finally reached China, which created the surplus.

Suntech Power Holdings, one of the world's largest manufacturers of solar panels, said it has failed to make payment on $541 million in bonds, which were due last Friday. In a statement, the manufacturer based in Wuxi, China, said it is working on "strategic alternatives" with lenders and potential investors. It's stock, which in 2007 traded above $80 a share on the New York Stock Exchange, closed at 59 cents on Tuesday, its lowest close on record.

Solar panelmakers worldwide have suffered as Chinese panels flooded the market. Plunging prices have forced companies worldwide to shut down operations or declare bankruptcy. In perhaps the most infamous case, California-based Solyndra received $528 million in Department of Energy loan guarantees and then went bankrupt in 2011. 

Last year the US government imposed tariffs on Chinese solar manufacturers in an effort to curb the "dumping" of underpriced products.

"The long-term future for solar is bright, but the market is going through an adjustment period,"  Trevor Houser, a partner at Rhodium Group, a New York-based consultancy, said via telephone.

The falling prices of panels have had a positive effect on sales. In 2012, the US solar market grew by 76 percent, installing a record 3.3 gigawatts of capacity, enough to power more than 500,000 homes, according to the Solar Energy Industries Association (SEIA) and GTM Research.

“We’ve brought more new solar online in 2012 than in the three prior years combined," said Rhone Resch, president and CEO of SEIA, in a statement last week. "This sustained growth is enabling the solar industry to create thousands of good jobs and to provide clean, affordable energy for more families, businesses, utilities, and the military than ever before."

The demand just is not growing fast enough, leading to a global consolidation of solar panel manufacturers. 

The news about Suntech suggests the consolidation is creeping into China, where government subsidies have long muted market realities. Other major Chinese producers including Yingli Green Energy Ltd., LDK Solar Co,. and Trina Solar Ltd. have reported heavy losses, according to the Associated Press.

In the long run, the consolidation may be good for solar. As the market sorts through excess supply, panel prices will stabilize, offering the remaining American and European solar companies to compete with fewer artificially-cheap products. 

"This is normal," said Mr. Houser, who leads Rhodium Group's energy and natural resources work. "This is what you would expect to see in a booming technology."

You've read  of  free articles. Subscribe to continue.
Real news can be honest, hopeful, credible, constructive.
What is the Monitor difference? Tackling the tough headlines – with humanity. Listening to sources – with respect. Seeing the story that others are missing by reporting what so often gets overlooked: the values that connect us. That’s Monitor reporting – news that changes how you see the world.

Dear Reader,

About a year ago, I happened upon this statement about the Monitor in the Harvard Business Review – under the charming heading of “do things that don’t interest you”:

“Many things that end up” being meaningful, writes social scientist Joseph Grenny, “have come from conference workshops, articles, or online videos that began as a chore and ended with an insight. My work in Kenya, for example, was heavily influenced by a Christian Science Monitor article I had forced myself to read 10 years earlier. Sometimes, we call things ‘boring’ simply because they lie outside the box we are currently in.”

If you were to come up with a punchline to a joke about the Monitor, that would probably be it. We’re seen as being global, fair, insightful, and perhaps a bit too earnest. We’re the bran muffin of journalism.

But you know what? We change lives. And I’m going to argue that we change lives precisely because we force open that too-small box that most human beings think they live in.

The Monitor is a peculiar little publication that’s hard for the world to figure out. We’re run by a church, but we’re not only for church members and we’re not about converting people. We’re known as being fair even as the world becomes as polarized as at any time since the newspaper’s founding in 1908.

We have a mission beyond circulation, we want to bridge divides. We’re about kicking down the door of thought everywhere and saying, “You are bigger and more capable than you realize. And we can prove it.”

If you’re looking for bran muffin journalism, you can subscribe to the Monitor for $15. You’ll get the Monitor Weekly magazine, the Monitor Daily email, and unlimited access to

QR Code to Suntech Power defaults. Solar troubles reach China.
Read this article in
QR Code to Subscription page
Start your subscription today