The imminent bankruptcy of Suntech, based in Wuxi, China and formerly the No. 1 manufacturer of solar PV modules in the world, may please many Western manufacturers that suffered from the company’s below-cost selling strategy. But schadenfreude offers scant comfort for the dozens of solar PV manufacturers, Chinese and Western, that have been driven into failure in the past few years by China’s 5-year strategic plan to dominate solar PV manufacturing. Suntech was one of the largest of the army of unprofitable Chinese manufacturers that have topped rankings of annual production for the past 3 years.
Despite ambitious domestic installation targets for solar PV, more failures are yet to come in China as the country becomes a victim of its own success and the Chinese market continues to consolidate. As with European and American companies, Chinese manufacturers will likely enter into a number of “strategic partnerships” that result in more vertically integrated providers, including some with project development operations. This is a strategy that has enabled FirstSolar and SunPower to ensure markets for their own modules.
The brutal fact is that no individual solar (or battery, or any other) manufacturer can compete with Chinese state capitalism. Many policy makers and analysts would love to see an expansion of solar manufacturing in this country. Yet, we are in this situation today because consumers, as always, have spoken with their dollars. There is a reason that DVD players, digital cameras, and cell phones are not manufactured in the United States. Solar PV cells and modules are now also rapidly commoditizing.
Still, even though the below-cost Chinese market flood has contributed to manufacturing job losses in the United States and Europe, the number of solar PV installation jobs has increased considerably. Ultimately, the result is better value for consumers and a growing overall market. The Chinese government is effectively subsidizing the cost of solar PV for consumers in the United States and around the world – and that’s not a bad deal, unless you’re a failing solar PV maker.