A Chinese solar giant goes bankrupt, and why that's a good thing

Once the world's largest solar panel maker, Suntech Power, has finally been forced into bankruptcy. The company has been running out of cash for months, defaulted on a loan payment recently, and has now become the biggest casualty yet of the coming consolidation of the global solar industry.

This week eight Chinese banks asked a court to find Suntech subsidiary Wuxi Suntech insolvent and to allow it to begin restructuring. Suntech responded to the court and said it would not object. The New York Times reported that the bankruptcy is "expected to lead to a takeover of the Wuxi operations by Wuxi Guolian, a financial conglomerate controlled by the city government of Wuxi."

The solar market has seen an oversupply of solar panels and plummeting prices for those panels for over two years now. Two thirds of solar cells are made in China, where the Chinese government has given Chinese solar makers access to large low cost loans. The oversupply and drop in prices has led to huge solar manufacturers like Q-Cells to startups like Solyndra and Abound Solar to file for bankruptcy.

Suntech solar panels

Suntech may be the largest to date, but it won't be the last solar maker to crash. As MIT Tech Review put it earlier this week: "hundreds of solar companies need to fail to help bring the supply of solar panels back in line with demand."

The weeding-out process will help slow the fall in solar panel prices and allow demand to rise back up again. Down the road the re-balancing will enable these companies to continue to invest in more efficient cells and new innovations, which will bring down the cost of solar through technology even more. Another 180 solar panel makers could reportedly disappear by 2015 due to consolidation.

At the same time, Suntech's woes partly come from a financial scandal. The company got in trouble with a fund it controlled that financed solar power plant development in Europe.

Of course, it's not all positive that Suntech has declared bankruptcy. As Ucilia Wang wrote for us last week:

The drama presents an ugly turn for a company that was solid and took technology and market risks to grow. . . Chinese companies in general had been known more as mass producers rather than innovators. . . Suntech's decline also leaves a depressing note in the efforts by the federal and local governments to expand solar manufacturing in the U.S.

Related research and analysis from GigaOM Pro:
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http://gigaom.com/2013/03/20/a-chinese-solar-giant-goes-bankrupt-and-w

A startup aims to crank up solar power with efficient materials

Raising money for solar technology manufacturing is tough these days. But a startup called Malachite Technologies hopes to break through with an idea to design equipment that can make a solar cell using super efficient semiconductor materials that can boost the solar energy generation of a panel.

The company pitched a hybrid solar cell concept and at the western regional Cleantech Open event last Friday (winners are announced today), and won over judges in the renewable energy category. The Cleantech Open will hold its national competition in San Jose next month.

The ultra efficient semiconductor materials are in the III-V family, and each III-V cell will sit on top of a silicon cell. Silicon is found in most of the solar cells on the market today, and the most efficient among them, made by SunPower, can convert 24 percent of the sunlight into electricity.

Malachite plans to stack a silicon layer with a gallium-arsenide layer to create a cell that should theoretically be able to achieve 38 percent efficiency, said Robert Weiss of Malachite during the pitch to the judges. Weiss was the former CTO of DayStar Technologies, which makes ultra thin solar panels using copper-indium-gallium-selenide (CIGS).

The III-V cells are less common because their materials and manufacturing process are more expensive. The cells are usually made with a combination of materials such as indium, gallium, germanium and arsenic. These cells are typically found in solar panels that are equipped with lenses to concentrate sunlight onto the cells to boost their energy production. Using the optical booster means the cells themselves could be far smaller, which then reduces the overall equipment and production cost. The most efficient III-V cell, made in the lab and not subject to any concentration, has achieved nearly 30 percent efficiency.

As with many solar cell technologies, the scientific concept Weiss presented isn’t new. The big challenge is to design the process and equipment to not only produce the desired efficient cells but to also produce them in large quantities at low costs. That last part is what has stumbled many solar technology startups such as the now bankrupted Solyndra and Abound Solar over the past year, especially when they were trying to scale up production at a time when there was a bumper crop of solar panels in the market and much larger rivals were able to cut prices and take losses.

Not a cell maker

Malachite doesn’t want to sell solar cells. Instead, it wants to sell the factory equipment for making those cells, perhaps to silicon solar cell makers. The III-V cells usually are made in a process called metal organic chemical vapor deposition (MOCVD), which is expensive and slow. Weiss proposes to use the physical vapor deposition (PVD) process, or sputtering, that knocks loose atoms from semiconductor materials and attach them to a substrate to form a cell. PVD has been used for making CIGS thin films.

Weiss wants to raise up to $2 million to engineer and show a workable cell design. After that, the startup will likely need $10 million to assemble the equipment to complete a prototype cell. Another $30 million should enable Malachite to deliver beta equipment to customers for testing, Weiss said.

Catching investors’ interest will be difficult these days. Many solar cell and panel makers have built up huge factories, some at gigawatt-scale, only to find that demand isn’t there yet. Some of the top 10 solar manufacturers, including Suntech Power and First Solar, have scaled back production or postponed factory expansion plans. Many have filed for bankruptcy, including veterans such as Q-Cells, which is being sold to Korea-based Hanwha Group.

GTM Research released a report on Tuesday that is projecting that 180 solar panel makers will disappear all together or get bought by 2015, and nearly half of them will close factories in places with high manufacturing costs, such as the U.S., Europe and Canada.

http://gigaom.com/cleantech/a-solar-startup-aims-to-crank-up-solar-power-with-efficient-materials/