FlashBack

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.

 

 

 

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One Response to FlashBack

  1. Greed of becoming sudden rich or very BIG etc needs a question on the intent of Promoters, Fund raisers, Funding channels / agents / FIs etc.

    Moserbaer, IndoSolar, Solyndra, LDK Solar etc are not smaller companies. But, are facing the heat. The issue here is how these companies got funded and continue to get funding despite huge losses and what makes them so special when we know that we can’t get back like in few Air line companies. It all depends on Promoter’s, their team and the very important ethical values which must be built in Business plan. All big companies were small in the beginning. Infosys was small, but, was believed in distributing the wealth among stake holders including employees with Transparency and business plan assumptions shared honestly at all levels. The fund arranging persons / agencies / corporate companies / FIs have to exhibit the yard sticks with integrity and should not just work for commissions, then, INDIA can excel with sustainable business plans for multilateral benefits.

    These ill intention or the irresponsible funding or fund raisers (without any accountability after receiving the commission) have made funding extremely difficult new players / entrepreneurs with good intent.

    There are few small companies promoted by real estate giants or stock brokers etc, who signed few documents with middlemen to access funds, but, can not sell good quality panels, but, what is the meaning of such kinds of Financing or this medium of arranging finance without accountability or success. What is the responsibility of evaluator on behalf of gullible investor ? Greed or ignorance of Technology risks??

    Like

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