Monday, April 23, 2012

Solar Industry Suffers Tough Week With Two Major Bankruptcies

The solar industry hit another rough patch last week as two major solar companies, Solar Trust of America and Q-Cells, filed for bankruptcy. The combination of reduced subsidies for solar projects and cheaper Asian imports hit these companies that at one time were applauded for their very ambitious plans.

As the fallout from the Solyndra bankruptcy controversy still ricochets in and beyond Washington, opponents of the clean energy industry will use the examples of Q-Cells and Solar Trust to prop up their arguments that solar is a bum deal for the economy and taxpayers.

Solar Trust sought bankruptcy protection on April 2 after its majority owner, Solar Millennium, started insolvency proceedings in Germany. Solar Trust had planned to build the 1000 megawatt Blythe Solar Power Project 220 miles east of Los Angeles. Last year the firm had been awarded a conditional $2.1 billion loan guarantee from the Department of Energy, but months later ended up not signing for the loan. After Solar Millennium filed for bankruptcy protection, Solar Trust had lost most of its liquidity. Germany, long a global leader in solar development, has watched the solar industry suffer after it slashed its feed-in tariff rates. German taxpayers had long supported the industry with $130 billion in subsidies, but between fiscal austerity and cheaper Chinese imports, the immediate outlook for German solar firms looks grim.

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