Bankruptcies Continue in Solar Industry - Motley Fool

Solar Manufacturers are going bankrupt despite the fact that they are heavily subsidized by tax payers. This cannot replace fossil fuels, it can't even fund itself. This is a reality check for green enthusiasts.

SolarWorld, the European manufacturer of solar panels that had one of the largest manufacturing plants in the U.S., filed for insolvency. This follows Suniva's bankruptcy in April and leaves the U.S. without much non-bankrupt solar manufacturing capacity outside of First Solar's (FSLR -4.06%) plant in Ohio, SunPower's (SPWR -6.40%) pilot lines, and Tesla's (TSLA -5.00%) incomplete Buffalo factory.

U.S. manufacturers have taken the brunt of the industry's downturn over the past year, driven by about a one-third decline in solar panel prices. And the economics of U.S. manufacturing just doesn't work at those prices in a competitive market, and customers aren't willing to pay much of a premium for "Made in the U.S.A." solar panels. ...

Solar panel manufacturing is particularly difficult because it takes hundreds of millions to build out manufacturing capacity and returns have been pretty terrible. Below is the net property, plant, and equipment on the balance sheets of Canadian Solar (CSIQ -6.21%), JinkoSolar (JKS -2.25%), SunPower, and First Solar, alongside and the associated return on assets. You can see that the return on the massive investment is pretty bad. 

CSIQ Net PP&E (Quarterly) Chart


 The assets that have been built also become obsolete very quickly. A manufacturing facility built a decade ago is likely worthless without major upgrades. For example, SunPower shut down most of its E-Series production recently after building a more efficient X-Series production facility, and First Solar is tearing down its manufacturing process and spending around $1 billion to upgrade to a product it's calling Series 6. 

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