Author Topic: Solar is going good as only 112 go out of business over 5 year period (DEC 2014)  (Read 2146 times)

Online Carl

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Since 2009, 112 solar energy companies in the United States and European Union have declared bankruptcy, closed their doors or been acquired by competitors under suboptimal conditions, according to a list put together by Greentech Media.

To date, 76 solar companies have “closed, gone bankrupt, become insolvent” and another 36 have “ended up in assignment for benefit of creditors, or have been acquired in less than positive circumstances,” according to Greentech’s Eric Wesoff.

Greentech has been monitoring solar company closures since 2009, when only some five companies went bankrupt or closed and 5 more were acquired by other companies. But the number of bankruptcies and closures shot up dramatically by 2012 and 2013 to 38 and 20, respectively.

“That was when solar manufacturing overcapacity and price pressure brutally culled the field,” writes Wesoff. “The 2014 dead pool is much smaller and much less painful to view.”

So far in 2014, only eight solar companies have closed their doors while another four have “ended up in assignment for benefit of creditors, or have been acquired in less than positive circumstances,” according to Wesoff.

Wesoff argues, however, that while the list is somewhat “macabre” it’s a good sign for the industry as “solar companies left standing in 2015 are the firms with effective business plans and value to add to the marketplace.”

Solar industry bankruptcies became a hot-button issue in 2011 after Solyndra declared bankruptcy. The company went broke after receiving $535 million in federal loan guarantees from the Obama administration.

Solyndra was quickly followed by Abound Solar and other green energy companies backed by the federal government. Abound got a $400 million loan guarantee from the Obama administration, but only used $68 million before the government cut off funding in the wake of Solyndra’s scandalous bankruptcy.

Executives from Solyndra and Abound blamed China for their financial woes. They argued a flood of cheap solar panels from China were undercutting their ability to compete, since Chinese panels could be made more cheaply than U.S.-produced panels.

“With over $30 billion in reported government subsidies, Chinese panel makers were able to sell below cost and put Abound out of business before we were big enough to pose a real competitive threat to China’s rapidly growing market share,” Abound Solar CEO Craig Witsoe told Congress in 2012 after his company had declared bankruptcy.

In the years following the demise of Solyndra and Abound, U.S. solar panel producers successfully lobbied the Obama administration to slap tariffs on panels imported from China. In July, imposed tariffs between “26% and 42% on equipment made by several Chinese solar-panel makers,” The Wall Street Journal reports.

The move has helped spur domestic solar manufacturing by making their more costly panels more economically viable. WSJ notes that Chinese panels “have been far cheaper than those produced in other countries, driving down overall prices in the U.S. by about two-thirds since 2010.”

Chinese panels now cost about “68 to 73 cents a watt, compared with an average of 83 cents for panels made in Europe, Japan and the U.S.,” WSJ reports.

In 2013, the EU came to an agreement with China on solar panel exports, but companies, led by German-based SolarWorld (which also led the tariff fight in the U.S.), are already accusing Chinese companies of selling panels below the minimum-allowed price.

Aside from high tariffs, solar panel producers benefit from a slew of federal, state and local subsidies and mandates aimed at increasing green energy production.

For example, solar panel users can get a 30 percent federal tax credit for “qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer,” according to the Database for State Incentives for Renewables & Efficiency.

Most states also have what are called Renewable Portfolio Standards. These are mandates that utilities get a certain amount of their power from green energy sources, like solar and wind, each year. California currently has the most aggressive RPS, requiring utilities to get 33 percent of their power from green energy by 2020.

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  I removed all of the obnoxious links and nosy advertisements as I pasted the article...here is the link:

http://dailycaller.com/2014/12/08/112-solar-companies-have-closed-their-doors-in-5-years/


Even with the millions in tax throw-backs and manufacturing assistance ,they just can't find enough gullible people to buy into solar.

Offline mountainmoma

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While I love my solar system, the abilty for the companies to stay in business is brutal. Most manufacturers of my equipment were bought out, or otherwise no longer exist. there is alot of consolidation, you hear of a few larger companies and alot of small ones have folded. I do not think that means the industry itself is getting smaller, it is certainly getting more mainstream out here, but people are flocking to one or two large companies, so alot of consolidation.

Some of the consolidation is going full verticle integration, as well as name recognition, as in the Solar City/Tesla connection, so install as well as some manufacture. And, there is nothing new that Musk is doing, the whole solar shingle thing has been around forever. But, maybe now the timing is good. I wouldnt use solar shingles myself, I like the panels being seperate from the roofing waterproofing

Online Carl

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While I love my solar system, the abilty for the companies to stay in business is brutal. Most manufacturers of my equipment were bought out, or otherwise no longer exist. there is alot of consolidation, you hear of a few larger companies and alot of small ones have folded. I do not think that means the industry itself is getting smaller, it is certainly getting more mainstream out here, but people are flocking to one or two large companies, so alot of consolidation.

Some of the consolidation is going full verticle integration, as well as name recognition, as in the Solar City/Tesla connection, so install as well as some manufacture. And, there is nothing new that Musk is doing, the whole solar shingle thing has been around forever. But, maybe now the timing is good. I wouldnt use solar shingles myself, I like the panels being seperate from the roofing waterproofing

But MUSK and his alternative energy business takes in nearly 5 BILLION a year of government subsidies....How would he profit without playing the subsidy game?

http://www.latimes.com/business/la-fi-hy-musk-subsidies-20150531-story.html

LVWood

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Fewer companies going under because there are fewer???

Online Carl

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  Also due to China flooding the market with products.

Offline iam4liberty

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  Also due to China flooding the market with products.

Yes.  And it probably will continue because of China's vertical integration.  Since the Chinese have a dominant position in both battery tech and solar power they can take a loss on the one and still profit.  They also are large lithium miners and have made major investments to lock up lithium production from Australia and Argentina, for example: http://www.abc.net.au/news/2017-02-08/chinese-investment-driving-wa-lithium-boom/8252068

Make no mistake about it, Tesla is trying to be a smart-battery company first and foremost.  The rest (electric vehicles, solar installs) is just a way to create demand for those batteries.  They are attacking it from a different angle than the raw materials approach of the Chinese companies.  They are trying to produce batteries with longer lives and more stable chemistries.  So their business model is to lock up associated IP.  Elon musk primarily looks for industries where innovation has been stagnant and then applies research to advance that.  For example he looks at rocket payload delivery and sees they are using the same tech as in the 1970s despite advancements in fuel, computer guidance, gyroscopic sensors, etc.  So it is obvious that it can be done better.

Net, it is a different type of business model with very different time horizons and risks.  From an investing standpoint this can be a very dangerous proposition.  But sometimes it just works out.  For example, value investors thought Google (alphabet) was a nutty investment opportunity based on traditional metrics too: http://www.cnbc.com/2017/05/06/warren-buffett-admits-he-made-a-mistake-on-google.html.  But it turned out to be a sound business in the end.

Offline mountainmoma

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The company that made this great innovation, better batteries than lithium ion, for the stationary market (weight/size), just went chapter 11 last month.

They didnt have the name/personality/connections of musk to keep the investment and subsidy money rolling in while they scaled up.

Everyone loved the product. Cheaper and less problematic for home battery storage, uses easy to get materials ( ie., not lithium !), customers were buying them as quick as they could make them, but they simply ran out of money while in the infant stage. Maybe they will reorganize. maybe someone will evetually buy out their patent in 10 years and bring it fully to market -- probably Musk. WHo knows what kind of politics and connections make a difference here.

I own the batteries, they realy are as advertised. Aquion, NOT the pallet sized M moduales, just the S-stack, or evergreen I think they renamed it. Anyways, yes, brutal market.

Online Carl

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  Edison cells have reasonable ,overnight,storage and a 30 year plus average life...but even they have fallen in the ditch as few people today even remember them. Edisons Nickle Iron cells were used by many small telephone providers for power and blackout proofing the phone system.
\
https://ironedison.com/nickel-iron-ni-fe-battery

Offline mountainmoma

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  Edison cells have reasonable ,overnight,storage and a 30 year plus average life...but even they have fallen in the ditch as few people today even remember them. Edisons Nickle Iron cells were used by many small telephone providers for power and blackout proofing the phone system.
\
https://ironedison.com/nickel-iron-ni-fe-battery

Yes, before the Aquions came out, I was thinking about Iron Edisons. But, they require maintanance, and I have proven myself bad at that. The Aquions are going to last a long time. I was going to use them fr daily peak shaving, but now that they are hard to replace, I will leave it for power outage backup. So, they will last a very long time, I bet at least 20 years.

from someone who uses the Iron Edisons :  " ....Mike Burgess So, it's not BS.. I have a large (800ah 48V bank) been in operation for half dozen years (oct 2011).
https://www.facebook.com/media/set/...
They have many good points, and some bad points. They are not as efficient as lead acid, and so part of that inefficiency shows up as lots of distilled water use. Another is that you need larger PV array to recharge them . They don't care if you overcharge or undercharge them, but when you overcharge, add more water. They have high internal resistance, therefore, you need more battery to handle surge loads. They are much less dense than lead acid, you need about 2x as much space. Their terminals are much larger and you have to make adapters to connect to them
They have a wide voltage range from full to empty, so you have to carefully plan your inverter and charger to be compatible with the battery requirements. But a bit undercharge, no problem..
Big downside - every 5-10 years, you have to take the bank apart and drain and replace the electrolyte. Heavy batteries, nasty electrolyte (KoH Potassium Hydroxide - Lye) ..."

https://www.facebook.com/pg/Lucky-Monkeys-Ranch-120212794718849/photos/?tab=album&album_id=209715335768594

Offline CPT Morgan

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My wife has worked in the consumer power industry for 30 years and even to them solar isn't a good ROI without major subsidies.  There may be areas of the world that isn't the case, but here in western Oregon it sure is.

LVWood

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Well I'm happy with my Solar City installation.
Except for the monsoons here in Vegas when it's too hot and humid to run the swamp cooler, the only thing I've been paying to Nevada Power is their monthly service charge of $11 bucks.
Sure I pay Solar City about $100 bucks a month lease, but it's much less than the +$200 - $300 dollars I used to pay to Nevada Power.