A March 19, 2013 piece in the American Interest notes that the giant Chinese solar company Suntech, the largest producer of solar panels in the world, has defaulted on a $541 million bond payment. The company has been relying on the Chinese city of Wuxi to remain solvent.
There are a number of reasons for the decline of Suntech, which is now trading for less than a dollar per share when it used to trade in the range of $85 a share as recently as December, 2007. There is a glut of Chinese made solar panels on the market, pushing prices below profit margins. Electricity produced by solar panels still cost roughly three times as much as that from coal fired plants. According to USA Today China is also facing competition from Korean solar firms and has been hit by antidumping regulations in the United States. Tax breaks and subsidies from China, keen to corner the solar panel market, have attracted a number of producers, furthering the glut and the decrease in price.
Suntech has also been rocked by allegations that a partner faked $680 million in collateral for a company backed loan.
Ironically it was the availability of Chinese produced solar panels and the prospect that country would own that market that President Obama used as a reason for subsidies to American companies which, like Solyndra, also ran into financial difficulties. The president is a firm supporter of solar and other alternate energy technologies.