Genesis Morocco: The Rise of China III Solar Struggles Continue: Q-Cells to File for Bankruptcy


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Genesis Morocco

Project Genesis is a strategic sustainable development framework for Morocco to translate from being a net importer of energy and a country facing water shortage issues, into the number one producer both of clean renewable energy and water in the region.

Thursday, April 5, 2012    <<Home

The Rise of China III Solar Struggles Continue: Q-Cells to File for Bankruptcy



Personal Notes : This blog follows closely the rise of China as a green Superpower. The fact of the matter is that its strategy whether growing capacity domestically or aggressively pursuing exports is paying off. Like in any markets there are bound to be consolidations at the top, with winners and losers of this natural trimming process. 


Frankly I don't see anyone being able to dispute China's capacity in mass producing solar cells. And so other concerns internationally suffer from this competitive edge to the point of being forced out the market. The question remains, was that China's intentions from the start ? To force others out of the market by being more cost competitive is a winning strategy, you can only cut your margins so far before reaching rock bottom, a selling price still profitable only if made elsewhere, in China that is. 


The U.S intends to defend its solar cells firms and domestic market by imposing higher tariffs on China's exports. I have stressed the fact that it is a shortsighted approach, there is I believe enough room for the made in the U.S and the made in China labels. Even more so if U.S firms concentrate on high end panels.


The question is what to do if Chinese firms are able to mass produce with a high quality output, and the answer is simple, let the market work, else we would be damaging everyone's interest. No one is interested in paying more for the same or worse off getting less for more. 


But while China looks set to dominate the mass produced photo-voltaic market, there is still a race going on in matter of efficiency. Indeed photo-voltaic panels are far from having reached high efficiency, so we are bound to see a race in the shape of leaders and followers in terms of panel efficiency. 


The firms that will be able to deliver the best return on investment on what is still costly utilities will share the market amongst themselves not those shielded by tariffs or sponsored by government incentives. 


The market is always right.

Article below by Steve Leone, Associate Editor, RenewableEnergyWorld.com

New Hampshire, U.S.A. -- Germany's Q-Cells, a solar industry giant that helped usher in a new era of solar energy, announced Monday that it will file for bankruptcy, but that it will continue to work to restructure.

In a statement released by the company, “the Executive Board and the preliminary insolvency administrator will work together to secure the continuity of the company within the insolvency proceedings.”

The move follows an unrelated higher court ruling on Friday that Q-Cells says limits its ability to move ahead with a debt restructuring plan.

The filing is the most prominent to date in the recent shake-out hitting the solar industry. The drastic drop in photovoltaic module pricing, the oversupply that has remained a drag on the industry and drastic subsidy cuts in Europe and beyond continue to put extreme pressure on solar manufacturers. Nowhere, perhaps, has this confluence of factors been felt greater than the headquarters of Q-Cells, which was the world’s biggest solar manufacturer in 2007 and 2008 before being overtaken during the rise of powerhouses coming mostly from China.

The company had worked to broaden its services in recent years. In addition to cell making, the company sells both silicon-based and CIGS PV modules. It also has moved toward project development, and in an earnings report the company said that that move has in fact boosted its economic health.

In 2011, Q-Cell’s production reached 783 MW, 717 of which came from solar cell production. The production of thin-film CIGS modules at German subsidiary Solibro accounted for 66 MW. That figure was down from just over 1 gigawatt produced in 2010. But unlike in 2010 when it was able to turn a profit, the company lost EUR 845 million in 2011. In March, the company said it expected 2012 to be another year of losses, but projected that it would return to positive earnings by 2013.

The company stock price, which hovered around $150 a share in early 2008, tumbled 50 percent to $0.16 per share on Monday.

Since August of last year, several solar companies, including Solon, Solar Millennium, Solyndra, Evergreen Solar and SpectraWatt, have filed for bankruptcy. On Monday, Solar Trust of America, the developer for the 1,000-MW Blythe project, also filed for Chapter 11.


Source : http://www.renewableenergyworld.com/

Genesis Morocco : http://genesismorocco.blogspot.com