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Why should solar companies fail!

by DrPrem Jagyasi

People from all over the world are constantly pressing over the fact that renewable sources of energy are the main solution to our depleting fossil fuels. Solar energy is one such source but now strategists and intellectuals want these solar companies to close down to consequently put an end to the production of solar panels. With this stark revelation, even you must be thinking – Why do we need to shut down and fail solar companies?


Well, when this environment friendly technology came into picture, many companies including the world-renowned Chinese company Suntech started working on their innovations in the production of solar panels. However, as of now, the situation is getting worse with each passing day as the company happens to struggle and it’s on the verge of bankruptcy. With low on cash and billions of dollars saddled in loans, the company is finding it difficult to meet the debts!

The worldwide production of solar energy is around 60-70 Gigawatts but the demand estimated for 2013 is only 30 Gigawatts. If Suntech shuts down all its factories then it might be helpful to other companies as that would slow down the falling prices and allow companies to buy new products for innovations.

The world market is currently flooded with solar panels with Chinese being the prime manufacturers. This has been good news to the consumers as the solar panel prices came down by around 60 percent in the beginning of 2011. Eight years ago, the cost for one panel was $4 per watt, which now costs 78 cents.

However, this rapid fall in prices has been hard for solar manufactures. With dropped prices, many companies are struggling to cope with quality production. It is very hard for the companies to keep up with the falling prices, leaving the profit next to nothing and invests low.

Chinese government, which once backed the production of solar panels, now says the least competitive companies must fail, as there are a total 500 module makers. However, the local government is keeping these companies open to avoid losing thousands of jobs.

There are some other problems caused by the overproduction and less demands like

  • The whole situation is a threat to commercialization of new advanced technology which is required for the production of new equipment, for instance, works on Pluto cells by Suntech which are designed to generate more electricity than the conventional one is now on hold.
  • With an excessive supply of solar panel, it has been difficult for start-ups, as they had to cancel all their plans because of a lack of demand.

So, probably, now is the time for survival of the fittest. With lesser demands and lesser pricing, the government is left with two options: Either to increase the overall demand of solar panels in the global market or to let the falling companies shut down!


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