Hobbled U.S. Solar Sector Puts China in Dominant Global Position

The bankruptcies of three major U.S. solar companies in recent weeks have propelled China into a dominant position in the global market for solar panel production, with the Chinese now commanding nearly three-fifths of the world’s production capacity.

While many U.S., Japanese, and European solar companies maintain technological advantages in the increasingly important renewable energy sector, analysts say a combination of low-interest loans, inexpensive land, and massive economies of scale has given China a huge cost advantage.

Earlier this week, California-based Solyndra Inc. announced that it was suspending operations and filing for bankruptcy protection because it was unable to compete with larger competitors.
Two other U.S. companies, Evergreen Solar and SpectraWatt, also filed for bankruptcy protection in August. The three companies represented about one-fifth of the U.S.’s solar panel manufacturing capacity.

Meanwhile, China’s three biggest solar power companies recently announced sales increases of 33 to 63 percent from a year ago. With increased manufacturing capacity worldwide and disappointing demand, prices of solar panels have dropped more than 40 percent in the last year.