While thousands of small solar companies in the world have gone / are going bust on account of massive industry oversupply and crashed solar panel prices, huge state owned Chinese conglomerates / quasi government companies are strengthening their position in the industry. There have been large number of bankruptcies in the West including such stalwarts like Q-Cells, Solyndra, Solon and many others. However despite massive indebtedness, no major Chinese company has gone bust. LDK Solar which has been in the news for a number of times for being on the verge of bankruptcy still manages to survive. The company was in the news with its customers and suppliers not renewing their contracts as the company faces almost $4 billion in debt compared to less than $500 million in market capitalization and huge losses.
The reason for no big Chinese bankruptcy is the backing of the government and the state owned Chinese banks which are propping up these bloated whales leading to a crazy oversupply. Note this issue is not specific to the solar industry, but the global wind and LED industry too are facing the same problems. The Chinese government in its mission to become a world leader in green industry has given massive subsidies to these industries leading to a situation of collapsing prices and companies.
The large state owned firms like Phono Solar, Talesun, GCL Poly are expanding their marketshare as other firms face existential crisis. China is set to become the world’s largest market for solar panels in 2012 and these state owned firms are garnering the largest share of projects and contracts due to their size and influence. No foreign solar company has won a decent sized solar power plant project in China which is stunning considering that China sells a majority of solar panels in most world markets. USA has recently imposed duties on imports of Chinese solar panels and there are indications that other major consumers such as Europe and India will follow suit given the unequal level playing field.