Suntech Solar, the Chinese solar panel manufacturing company that became involved in a number of Middle East solar energy projects, including deals to sell home solar panels in Israel and a bid for Abu Dhabi’s Masdar City’s Nour 1 solar energy project is now on the verge of financial collapse and eminent takeover. This revelation, as reported March 13 in the Energy and Environment section of the NY Times said that Suntech, one of the world’s largest manufacturers of photo voltaic (PV) solar panels, has nearly run out of cash as a result of investing more than 530 million Euro ($630 million) in German bonds which may prove to be fraudulent. This is bad news since Suntech had announced create a solar research center in Israel.
The resulting financial means the company faces takeover by other companies and investors as a bid to help it meet its obligations to company bondholders. The NY Times article went on to say that Suntech had reached an agreement with current investors to allow it more time to find ways to meet its financial obligations. Even with this short term debt reprieve, the current outlook for the company, which as recently as January launched a new research center in Israel’s Arava desert region does not look promising.
Suntech became one of the worlds largest suppliers of PV solar panels several years ago, when the idea of solar energy projects including smaller units for installation on private homes and business seemed to be on the way of becoming a common reality. S
untech made a deal in May, 2010, to supply an Israeli solar energy company, Solar By Yourself, with more than $35 million worth of solar panels for use in projects that SBY planned to construct in both Israel and Italy.
Solar energy projects are still being carried in many locations, including the Middle East. However, the increasing availability of natural gas as an energy source for operation of electricity power stations, combined with reduced “feed in tariffs” being offered by electricity companies for solar powered electricity, has resulted in some large electric power companies like Siemens puling out of solar energy projects .
China’s manufacturing practices of “dumping” products like solar panels on world solar energy markets is another reason for Suntech’s current economic woes which has resulted in anti-Chinese trade sanctions being enacted by countries in which local manufacturing companies have had to compete with.
What happens to Suntech, following the takeover, may be a bellwether for the future of Chinese and possibly other solar energy equipment manufacturers trying to survive in an ever changing solar energy business environment.
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