Chinese solar industry continues to suffer

New York Times : Suntech Power, based in Wuxi, China, and one of the world’s largest solar panel manufacturers, may have reached a deal to become partially or wholly owned by Wuxi’s municipal government holding company. The manufacturer, which has a deadline of Friday to pay back more than $541 million to bond holders but appears unable to do so, also announced that it was closing a plant in Arizona. Suntech has faced serious financial trouble since at least July 2012 when it revealed it had invested $690 million in apparently fraudulent German bonds. The company’s collapse is a major milestone in the crisis in China’s solar power industry. State-owned banks have provided $18 billion in loans to Chinese manufacturers, and the resulting 10-fold increase in production from 2008 to 2012 led to the cost of solar panels dropping significantly, although demand did not increase equally. International lawsuits and tariffs from the US and the European Union have contributed to the severe financial conditions that many Chinese solar panel manufacturers have experienced over the past several years.