Abstract Wuxi Suntech is the first large-scale solar energy company in China to declare bankruptcy. Local governments and business managers have realized that in the fierce market competition, cheap credit and government support cannot guarantee the permanent survival of enterprises. The operation after entering the bankruptcy process is complicated, the industry hopes...
Wuxi Suntech is China's first large-scale solar energy company to declare bankruptcy. Local governments and business managers have realized that in the fierce market competition, cheap credit and government support cannot guarantee the permanent survival of enterprises. The operation after entering the bankruptcy process is complicated. The industry hopes to see that under the premise of perfecting the market mechanism, changing the business philosophy and operating mode, the enterprise can be put to death. In the past 10 years, under the strong demand of the international market and the support of local government policies at all levels, the photovoltaic industry has been positioned as “China's advanced equipment manufacturing industry and emerging energy pillar industryâ€, and there has been rapid development. However, the outward-oriented development model of the photovoltaic industry has laid a huge hidden danger for the survival of enterprises. Since the outbreak of the financial crisis, especially since the European debt crisis, EU member states have tightened their spending and have lowered their subsidies for the photovoltaic industry, leading to a shrinking global PV market demand. In addition, in order to stabilize the domestic employment market, Europe and the United States have repeatedly raised countervailing duties and anti-dumping duties on solar panels in China, which has weakened the international competitiveness of Chinese PV companies.
The most worthy lesson is that Chinese companies have failed to pay attention to changes in the international market in a timely manner. When the international market shrinks, they still pursue high output values. In particular, the production of primary products such as polysilicon is growing too fast, resulting in a backlog of products. In order to maintain market share, companies were forced to participate in price wars, resulting in a sharp drop in profits. At the same time, the development of the domestic raw material market and the high-end market has not started in time. A large number of raw materials and conversion devices and voltage regulators related to the core components of photovoltaic power generation are still basically dependent on imports. The irrational phenomenon of lack of raw materials in the industrial chain and the rapid development of low-end links and the lag of high-end links has broken the balance of corporate trade balances and worsened corporate balance sheets, resulting in heavy debts for PV companies.
The photovoltaic industry was once a national policy-oriented industry, affecting the lifeline of the local economy. In order to maintain local employment and economic stability, some local governments use local taxes to repay their debts. Although they have delayed the possibility of layoffs, mergers and acquisitions, and even bankruptcy, corporate debt has piled up. Getting rid of excessive dependence on the government and seeking new capital injection through market-oriented operation is a difficult choice for enterprises in distress. At the same time, enterprises should actively carry out product transformation and upgrading, extending from a single selling component to downstream industries such as production units and assembly power stations, in order to maintain the market competitiveness of enterprises.
The bankruptcy program of Wuxi Suntech has initiated the integration mechanism of China's photovoltaic industry, which helps to alleviate overcapacity, but it is not enough to adjust the capacity balance of the entire industry. In the difficult environment of cyclical downturns in demand and prices, China's solar industry is roughly divided into two camps: companies represented by bankrupt Wuxi Suntech are shrouded in high debt haze; but there are still some companies with healthier balance sheets. A low-cost, low-profit approach seeks to grow and is ready to take a slice of the market for big corporate bankruptcies.
Whether it is a merger or a forced reorganization, the healthy development of the photovoltaic industry is inseparable from a sound market mechanism. China's "Distributed Power Grid-Connected Services" policy officially implemented on March 1 opened the curtain for domestic PV distributed applications. According to the National Twelfth Five-Year Plan for Energy Development, China's distributed solar power generation will reach 10 million kilowatts in 2015, providing a good development opportunity for the transformation of the outward-oriented development model of photovoltaic enterprises. Efforts to expand domestic demand and form a competitive advantage in the active development of distributed energy construction will be the road to survival for the photovoltaic industry in the future.
Of course, in order to get rid of unfair sanctions in the international market, we must also walk on two legs, stabilize domestic market share while expanding domestic demand, and gradually shift the photovoltaic industry market from Europe and the United States to emerging markets such as Asia Pacific. The China Photovoltaic Industry Alliance estimates that by 2015, the proportion of the Asia-Pacific PV market to global demand will rise from 11% in 2010 to 26%.
People believe that after the current difficult period, the development prospects of China's photovoltaic industry are bright.
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