Recently we across the news that Centrotherm Photovoltaics and Abound Solar went bankrupt.
There have been many other solar bankruptcy cases in Europe and USA.
While reading this, I remembered a meeting which I was a part of; in 2009 as a consultant. An Indian company was looking to initiate solar panel manufacturing unit in India and had a meeting with an European solar equipment company (Not Centrotherm).
The European solar company was offering a buy back offer for a certain % of solar panels manufactured using their equipment; for the first 5 years.
Common sense made me ask the question as to how can the European company guarantee buying of solar panels from the Indian manufacturer at a certain price for X no of years. The answer I got from the European company “We understand the global market and based on our past experiences and forecasts, we are able to arrive at our estimates”.
But no clear calculations were shown.
Based on the meeting and some more research, we arrived at a conclusion that this somehow does not fit in our thinking pattern. The investor will need to wait to understand the global scenario before accepting the buy-back terms at face value.
And look what we have now. From 2011, the prices have crashed and new solar bankruptcies are coming into picture.
At the same time, solar panel companies that have gone bankrupt; have put more pressure on the smaller players. The banks will now be more hesitant to fund projects involving new and smaller solar panel players; further giving a boost to the bigger players.
If readers are expecting bankruptcy cases only on solar manufacturing side; then you will be surprised to know that quite a few solar project developers have gone bankrupt in Europe.