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Europe’s biggest solar company REC puts itself on Sale as it loses Money in all Solar segments

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Renewable Energy Corporation used to be the biggest polysilicon and wafer producer for the solar industry just 4 years ago. The company grew crazily with high margins as demand for solar raw material polysilicon skyrocketed. However 4 years later, the company is a pygmy of its former self outgunned by Asian upstarts like GCL and OCI. I had earlier written that REC looked like the only European company which could survive this vicious solar industry downturn and had better prospects than the other big solar company Solarworld. This was due its vertically integrated model and its low cost Singapore factory. However the industry downturn has become even more pronounced with even two of the largest Chinese solar companies Suntech and LDK on the verge of bankruptcy (LDK has given up for all purposes selling 1/5th of itself for a paltry $23 million).

Can REC Survive

However REC unlike Solarworld, possesses solid competitive advantage in both processes and technology. The company is vertically integrated as it expanded from polysilicon into making of downstream C-si cells and modules. It also has shut down expensive factories in Norway and Sweden concentrating production in a new factory in Singapore. The company has been aggressively reducing costs and by end 2012 would be able to compete with the the super low cost Chinese solar panel companies. The company is also claiming a cash cost of only 11.5/kg for polysilicon which would make it the lowest cost polysilicon producer in the world.

Though REC has been facing capital problems, there is reason to believe that the company can survive and eventually thrive as it has cut out most of the flab and is becoming a leaner and meaner player. REC has made some very hard decisions like getting out of wafer production for 3rd parties as it can never hope to match wafer companies like GCL and Renesola in costs. It has started to concentrate on its core strengths of silane and polysilicon production. It is has not abandoned solar panel manufacturing as of now, but if pressures persist it might be a good idea to cut that out as well. While recommending solar stocks is one tough game, REC is the only European solar stock that one can recommend.

Read about REC Solar Panel Review on GWI.

What now for REC

REC came up with horrible Q3 2012 results which saw the company making losses in all solar segments. The company’s strongest segment polysilicon also saw lower shipments and losses as the spot price of $18.5/kg is much lower than its current cost of $25/kg. The less said about its module segment the better. The company which used to be the largest solar wafer producer is now outsourcing this to 3rd parties unable to compete. REC management has realized that despite all its efforts, it is losing battle and has put the company on the Sales Block. Q-Cells too had tried to sell itself before declaring bankruptcy. REC will also find hard to find buyers who know they can buy select pieces cheaply after the company is bankrupt. There is little appetite for big bang solar acquisitions now given that all solar companies are making losses and big industrial conglomerates are making a beeline to exit (Siemens, GE).

Solarworld is a Takeover target as well – it just does not want to admit it

Solarworld which is the biggest solar panel company from Germany lost marketshare to the Chinese companies in 2011. The company which has been at the forefront of leading anti-dumping charges against import of Chinese made solar modules into the USA, lost substantial amounts of money. Solarworld had earlier closed its panel making facility in California. The company sold lesser number of solar panels in 2011 compared to 2010 despite the global solar market increasing by 30-40% . With only around 800 MW of shipments, Solarworld has only 3-4% of the global marketshare compared to 10% for bigger Chinese rivals.

Read about Solarworld Solar Panels Review on GWI.


Renewable Energy Corp. (REC), the Norwegian solar-energy company struggling with falling demand and excess capacity, said it’s a merger candidate as the industry gears up for a probable consolidation.

“We won’t be surprised if there are more mergers in the time ahead” and REC is involved in discussions with possible partners, Chief Executive Officer Ole Enger said in an interview in Oslo today after presenting REC’s third-quarter results. “When results are like now, you must always be open for solutions that can give better results.


Sneha Shah

I am Sneha, the Editor-in-chief for the Blog. We would be glad to receive suggestions, inputs & comments on GWI from you guys to keep it going! You can contact me for consultancy/trade inquires by writing an email to

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