More job cuts loom as SolarWorld seeks debt restructuring
By Erik Siemers
SolarWorld has invested around $33 million in its Hillsboro factory in recent months, while it's work force over the same period has shrunk by nearly 90.
SolarWorld's issues aren't happening in isolation. The market globally is struggling with rapidly falling prices, of which SolarWorld has placed much of the blame on producers in China. The company last summer argued that the Chinese government is providing improper subsidies to its domestic producers and then flooding the market with low-cost panels to undercut its competitors. The company last year succeeded in convincing the U.S. government to impose tariffs on imported Chinese panels.
But some analysts say Chinese manufacturers are suffering just as much as their rivals in Europe and the U.S.
Andrew Chew, a solar industry analyst with Maxim Group LLC in New York, said Friday that the root of the industry's ills lies in over capacity.
Government incentives for solar, instituted to help lower the cost of producing what is an otherwise expensive source of energy, enticed a flood of new players to enter the market in recent years.
The result today is way more supply than demand.
“We had 32 gigawatts of demand in 2012. There’s 60 gigawatts worth of cell capacity,” Chew said. “You can understand what happens then.”
Even a wave of failures — Bloomberg reports more than a dozen solar companies last year filed for bankruptcy — did little to dent the over supply of production capacity.
Though the pricing remains at a level that SolarWorld officials consider unsustainable, the company says that sales in the U.S. — at least by volume — are robust.
In August, the company said it would invest $27 million in its Hillsboro factory with upgrades aimed at improving the performance of its solar panels. Santarris on Friday said since then the company has invested an additional $6 million in the Hillsboro operation.
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