Guest essay by Eric Worrall
Financially troubled solar businesses seem to be hitting the headlines a lot these days.
Solar Industry Slowdown Catches Up With SolarCity
By Mrinalini Krishna | May 5, 2017 — 11:04 AM EDT
After nice stretch of sunny weather, the last few months have clouded over for big solar. Declining prices for photovoltaic cells are hurting panel manufacturers and stressing solar installation businesses. This situation was in sharp relief this week in Tesla’s (TSLA) earnings, as its solar installation business, SolarCity, disclosed a big slowdown in builds. SolarCity commands 41 percent of the residential solar installation market, according to GTM. In its latest earnings, the firm revealed that it had installed 150 MW of panels in the first quarter, down nearly 39 percent y/y.
There are companies that are doing well. First Solar (FSLR) just reported strong earnings while Vivint Solar (VSLR) announced is expansion into Rhode Island and is expected to announce financial results next week. However, the list of struggling companies in the sector is longer.
SunPower Corp. (SPWR) reported its sixth consecutive quarter of losses and laid off 25 percent of its workforce. Verengo Solar filed for bankruptcy last year, while Sungevity and Suninva did the same earlier this year.
United Power acquires former home of bankrupt Abound Solar
By Doug Storum — May 2, 2017
LONGMONT — Brighton-based United Power Inc., has acquired the former home of Abound Solar Inc., in east Longmont for $8.8 million, according to public records.
9586 LLC, an entity registered to Boulder-based real estate firm W.W. Reynolds Cos., sold the 130,117-square-foot facility on 7.6 acres at 9586 E. I-25 Frontage Road just south of Colorado Highway 119 in Weld County. The building has been vacant while an effort to remove hazardous waste left behind by Abound was tied up in insurance claims court.
Abound Solar went bankrupt in 2012 after receiving stimulus money from the federal government.
Some solar businesses have resorted to begging President Trump for import duty protection against cheaper foreign imports.
Suniva Creates the Latest Solar Debacle
Written by Anne Fischer 28 April 2017
Suniva filed for bankruptcy protection on 17 April, and then nine days later filed a trade case mechanism with the International Trade Commission (ITC) to try to impose tariffs and to set minimum prices on all imported solar modules. This would add tariffs to those already imposed on Chinese modules.
Who is Suniva?
Suniva is based near Atlanta, Georgia and has manufacturing facilities in Georgia and Michigan. On its website, the company claims to be the “leading American manufacturer of high-efficiency, cost-competitive PV solar cells and modules.” (Suniva is majority owned by a Chinese company, Shunfeng International Clean Energy.)
In the past two years, as prices on solar modules dropped and demand decreased due to oversupply, Suniva was losing millions. Ultimately the company filed for bankruptcy, placing blame on Chinese manufactures who flooded the US market with cheap imports.
Why file Section 201?
Suniva’s filing a petition under section 201 of the Trade Act of 1974 is a condition of its bankruptcy. If the ITC determines that Suniva was “seriously injured” by solar imports, it can recommend to the Trump administration provide relief to Suniva in the form of tariffs on all imports in order to curb competition from manufacturers in any country other than the United States. Suniva sees this as an effort to get back into business with American-made modules.
To anyone who thinks that President Trump is the cause of the solar slump, its interesting to note the wave of solar bankruptcies began well before Donald Trump won the presidency. Aside from the spectacular failure of Solyndra, another big US solar business SunEdison declared bankruptcy in April 2016.
In the Market for a Solar Farm? SunEdison Has Some for Sale, Cheap
The spectacular failure of what was once the world’s biggest renewable-energy company has turned into a smorgasbord of wind and solar farms being gobbled up by infrastructure investors, clean-power developers and even a vegan soccer team.
Since filing the largest U.S. bankruptcy of 2016, SunEdison Inc. has hosted the biggest-ever sale of renewables assets. It’s shed at least $1 billion of assets from Southern California to Chile to India– some through record-breaking deals–including projects that would have died without new owners. With wind and solar supplying more than 11% of global electricity, the company’s debt-induced collapse enabled competitors to strengthen their existing hands or enter new markets.
“Developers have been picking at the carcass,” Nathan Serota, a New York-based analyst at Bloomberg New Energy Finance, said in an interview. “As it turns out, the carcass was not so bad.”
It is difficult to know for sure whether this apparent upswing in solar bankruptcy stories is significant.
What seems plain is that solar businesses, at least those which manufacture solar systems, are being squeezed between a flood of cheap cheap imports and cooling federal government enthusiasm for subsidising solar energy.
I believe the suggestions that China are dumping solar on the US market are credible – though if China wants to save the world by subsidising cheap solar for everyone, who are we to say no?
It is not all bleak news for US solar investors. despite federal indifference, there are still rich US states like California, whose legislature seems keen to continue pouring public money into the bottomless renewables money pit.
How long states like California can continue to ignore economic competition from low cost states is a different matter.