SolarWorld Files for Insolvency Citing ‘Ongoing Price Erosion’

SolarWorld AG, parent of the largest U.S. crystalline-silicon solar manufacturer, announced today it has filed for insolvency. 

In a brief statement, management said it concluded, following a diligent review, “that due to the ongoing price erosion and the development of the business, the Company no longer has a positive going concern prognosis, is therefore over-indebted and thus obliged to file for insolvency proceedings.” 

SolarWorld AG is headquartered in Bonn, Germany and operates a large manufacturing facility in Hillsboro, Oregon. The statement said the company is currently evaluating if its subsidiaries, which includes SolarWorld Americas, must also file for insolvency. The U.S. branch did not immediately respond to a request for comment.

SolarWorld has led several trade cases against Chinese solar manufacturers for allegedly dumping solar modules in the U.S. and Europe. In 2015, the U.S. Commerce Department set revised anti-subsidy rates on most Chinese solar imports at 20.94 percent. 

The woes of Western solar manufacturers have persisted, however. Prices across the upstream solar value chain started to decline in the second half of 2016 and have continued to nosedive. In March, SolarWorld issued a statement that China's trade aggression continues to trigger bankruptcies and layoffs, and called on the Trump administration to address solar trade during President Xi’s U.S. visit in April.

Georgia-based solar manufacturer Suniva, which recently filed for Chapter 11 bankruptcy protection, has also blamed China for “flooding the U.S. market” with cheap solar equipment. Suniva filed a petition under the Trade Act of 1974 last month that could spark another solar trade war.

“The case of Suniva dramatically demonstrates that the U.S. solar manufacturing industry still suffers from unfair trade. In particular, highly subsidized Chinese companies as well as other producers are globally dumping their products, forcing competitors to take losses, lay off workers and exit the market,” Juergen Stein, U.S. president of SolarWorld, said in a statement responding to the latest trade action. 

“SolarWorld has fought decisively against this kind of unfair competition for many years,” he continued. “China now has managed to circumvent and violate existing trade defense measures in several ways and again incited a ruinous price race to the bottom, destroying U.S. manufacturing jobs.”  

The company said it would “assess” the Suniva case, but did not declare any further action. 

“Given current module price trends, this isn't surprising,” said Jade Jones, solar analyst at GTM Research. “Even suppliers with best-in-class production costs are under margin pressure right now. This was abrupt and follows news of quarter over quarter shipment and consolidated revenue growth.”

“It should be noted that in the last downturn, SolarWorld avoided shuttering by restructuring and by petitioning for trade barriers in its two largest markets, the EU and the U.S.,” she added. “It's interesting that SolarWorld is filing for insolvency and have not announced plans that would revive itself.”

SolarWorld AG employs 3,292 people and operates facilities in Freiberg and Arnstadt, Germany, in addition to Hillsboro. Frank Asbeck, SolarWorld’s founder and CEO, issued a statement that management would “do everything we can to maintain as many jobs as possible,” PV Magazine reports. 

from GTM Solar https://www.greentechmedia.com/articles/read/solarworld-files-for-insolvency-citing-ongoing-price-erosion

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