Solar Crisis hits Inverter Business

Solar Panel Bankruptcies have been dime a dozen in the last couple of years, as a massive overcapacity led to  price crash. While solar panel producers have been the worst affected, other players in the supply chain have not been unaffected. Raw material polysilicon suppliers have also seen prices go below cost. Despite a huge increase in demand in 2011, this capacity glut led to a crash in prices throughout the solar chain resulting in bankruptcies of some of the biggest solar panel companies like Q-Cells, Solyndra etc. Western companies were the worst affected as they lacked government support  unlike the Chinese. Besides some of the solar behemoths, a large number of solar companies continue to go bust. Solar equipment companies are now feeling the heat as almost every company has stopped expanding capacity and there exists a large number of companies willing to sell almost new equipment for pennies to the dollar. Centrotherm, which was the second largest seller of solar equipment with revenues of more than $800 million also shut down due to a credit crunch.

Read about Solar Inverter Efficiency.

Solar inverter companies which had been doing relatively better due to less fragmentation and competition are now starting to face the music as well. While the biggest solar inverter manufacturers SMA and Power One have seen their stock prices and profits come down steeply, they are not in danger of shutting down. However smaller companies have been facing cash flow issues. Satcon which was amongst the top 5 USA solar inverter suppliers had fired 35% of employees in January 2012 as orders became scarce. Now Satcon has filed for Chapter 11, as it could not pay back its debtors. Satcon which primarily supplied utility solar grade farms in the USA has seen its marketshare decrease due to increasing competition.

We had speculated that Satcon may be a takeover candidate instead Satcon went bankrupt first.

The company has now decided to slash 35% of its workforce consisting of 140 solar jobs due to the ongoing solar crisis. Note other solar companies in the USA such as Solyndra, Spectrawatt have completely closed down while the smaller ones are on the verge of closing as well.

Satcon at its current price may be a good buyout target for bigger industrial conglomerates like GE and Siemens which do not have a strong presence in the solar inverter market.

Satcon PR

Satcon Technology Corporation® (NASDAQ CM:SATC), a leading provider of utility scale power conversion solutions for the renewable energy market, today announced that the Company and its subsidiaries have filed voluntary petitions under Chapter 11 of the United States Bankruptcy Code. The petitions were filed in the U.S. Bankruptcy Court for the District of Delaware.

Steve Rhoades, Satcon’s President and Chief Executive Officer, said “This has been a difficult time for Satcon. After careful consideration of available alternatives, the Company’s Board of Directors determined that the Chapter 11 filings were a necessary and prudent step, allowing the Company to continue to operate while giving us the opportunity to reorganize with a stronger balance sheet and capital structure. Our goal is for Satcon to emerge from bankruptcy reorganization and continue to provide our customers with the quality products that they need.”