Our readers have seen the evidence on previous posts here, and now they are about to see more: the solar energy industry is having a tough time in the global marketplace. Numerous companies based in California have had to file for bankruptcy in the last few years, with some opting for Chapter 11 bankruptcy and others going with a Chapter 7 "liquidation." However, as bad as the market has been for California solar companies, it appears that the problems are not isolated to the West Coast.
According to a recent report, a solar company based in Hawaii recently filed for bankruptcy, as did two others based in Germany. As a matter of fact, all of these bankruptcy filings occurred in the same week. The Hawaii-based company had to call-off the construction of a facility that was being built in Idaho as a result of the bankruptcy filing.
While there are usually a wide variety of problems to point toward when an entire industry has setbacks left and right, the consensus opinion on the main problem for the solar industry is this: a market flooded with cheaper products from China. This remains a problem for companies based in the United States despite the fact that the government has applied tariffs to Chinese-made solar products in an attempt to provide some relief in the situation.
Some of these solar power companies will not be able to make the kind of turnaround needed to come back to the marketplace with fresh products and fresh ideas. However, when this type of company does file for Chapter 11, there is at least a process whereby the company's leaders can submit a plan of reorganization in an attempt to streamline the company into a more profitable entity. Change is sometimes painful, but making all of the right steps in a bankruptcy proceeding can lead to the right type of change - change that results in a profitable, sustainable company.
Source: The Daily Caller, "Three solar firms file for bankruptcy in a week," Michael Bastasch, July 9, 2013