Solar panel makers are struggling after Germany and Italy, among other nations, cut solar subsidies, shrinking the European market.
And the industry is a large one, with heavy competition across the globe.
As China steps into the field, smaller panel makers are being hurt massively.
Solar panel costs have decreased heavily this year, mainly due to a number of Chinese companies in the industry. Labor costs are cheap in China, and those companies can produce panels at much lower costs than elsewhere in the world.
And these factors are the main reasons two solar companies have been struggling fruitlessly to stay afloat.
Solon SE (ETR: SOO1), a German solar panel maker, announced on Monday its plans to cut costs it can no longer handle.
The company has a panel facility in Tucson, Arizona that will be closed down by October.
Dan Alcombright, CEO of Solon North America, told Tom Cheyney of PV Tech:
“We came to the strategic conclusion that as a small 60MW manufacturer trying to compete against 200 manufacturers at least, with some of them being multiple times our size, is kind of like beating your head against the wall.”
The shutdown of this plant will cost over 60 employees their jobs, and the layoffs will not end there.
At its Berlin headquarters, Solon will also slim down its workforce by 15%, mostly in administrative positions.
The company has been struggling in revenue, reporting a loss of $91 million for the first half of 2011, compared to the net loss of $13.7 million for the same period last year, reports Bloomberg.
And by the end of the year, it will owe German banks around $396 in loan repayments.
Solon is leaving the U.S. solar panel manufacturing industry and refocusing those efforts instead on designing and building solar installation projects using panels from other manufacturers, reported CNET.
But Solon is doing well in comparison to Evergreen.
On Monday, Evergreen Solar Inc (NASDAQ: ESLR) filed for Chapter 11 bankruptcy, reporting debts of $485.6 million compared to $424.5 million in assets.
The company had also received $58 million in subsidies and tax breaks from the state of Massachusetts, money that the state now wants back.
Evergreen solar is in a dismal place. In the glory days of 2007, the company employed more than 900 people and had stock worth a high of $113.04.
Yesterday, upon declaring bankruptcy, the company had 85 employees and stock closing at $0.18, reported the Boston Globe.
Though stocks had been consistently below $1 ever since May 20, yesterday they dropped 57% from the opening price of $0.42.
They were down even more on Tuesday, to $0.17.
Earlier this year, Evergreen closed their manufacturing plant in Devens, Massachusetts, laying off around 800 employees.
Now they may even struggle to sell their remaining assets.
The company plans to sell to bond holders or, if a higher price is offered, other buyers.
That’s all for now,
Brianna
