Although many of our California readers are probably tired of hearing about the solar energy industry, another company has made the news, and it isn't encouraging for the health of this sector of the economy. Signet Solar, a California-based solar panel manufacturer, recently filed for Chapter 11 bankruptcy.
It seems that the trend of solar power companies filing for bankruptcy will continue. Reports indicate that the material used in the production of solar power technology, specifically solar panels, is getting cheaper and more efficient. This is forcing some companies, particularly those who specialized in older, more expenses solar technology, to either adapt or go out of business.
In Signet Solar's Chapter 11 filing, the company listed approximately $9.8 million in debts against $30 million in assets. The company actually shut down operations in 2010, after it canceled plans to go forward with a manufacturing plant which would have cost about $840 million.
Most companies that begin the Chapter 11 bankruptcy process do so with the intent to reorganize the business structure of the company, while at the same time attempting to come to terms with creditors on how debt should be repaid. This transformation of the company all takes place while the business stays in operation in an attempt to turn a profit. However, not all companies are successful in emerging from the Chapter 11 bankruptcy process. When it becomes obvious that a company is in no shape to adjust and survive, it can become necessary to simply end the business venture. Either way, the bankruptcy process can be complex, and certain industries, like the solar industry, may see more bankruptcy filings before the market dictates demand.
Source: San Francisco Business Times, "Signet Solar finally files bankruptcy," Lindsay Riddell, Nov. 29, 2012