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Chinese solar industry faces weak sales, price war

Chinese solar panel makers that grew fast over the past decade are suffering big losses due to slumping global sales and a price war.
By JOE McDONALD Modified: August 22, 2012 at 10:14 pm •  Published: August 23, 2012
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— Chinese solar panel makers that grew fast over the past decade are suffering big losses due to slumping global sales and a price war that threaten an industry seen by communist leaders as a role model for hopes to transform China into a technology leader.

Another looming challenge: Moves by the United States and Europe toward imposing possible anti-dumping tariffs on Chinese-made solar panels that might further depress sales.

Financial problems are likely to force painful changes in the Chinese industry including possible mergers, bankruptcies, factory closures or layoffs, industry analysts say.

Companies have been hurt by weak sales, especially in debt-crippled Europe, the leading global solar market, but also by Chinese government policies that encouraged hundreds of small companies to rush into the industry. They flooded the market and depressed prices.

Five major Chinese manufacturers, including industry leaders Suntech Power Holdings Ltd. and Yingli Green Energy Ltd., reported total losses of nearly $250 million in the latest quarter. One of them, LDK Solar Co., also reported an eye-popping loss of $588.7 million the previous quarter.

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