California, USA -- Sovello has joined a growing roster of solar companies that have filed for bankruptcy over the past year, the German company said Monday. The announcement came after another German solar manufacturer, Soltecture, filed for bankruptcy last Wednesday.
Sovello makes silicon wafers and turn them into cells and then panels, and it was once a joint venture of Q-Cells, Evergreen Solar and Renewable Energy Corp before being sold to Ventizz Capital Fund IV in 2010. Evergreen and Q-Cells, incidentally, also went bankrupt. Evergreen sold its core assets to China Private Equity Investment last November while Q-Cells is still doing business as it goes through the bankruptcy proceeding and works on lining up more money.
Sovello makes use of Evergreen’s technology to make polycrystalline silicon wafers, which at 135 microns, is thinner than the more common 200 micron wafers on the market today. Making thinner wafers to cut costs has been one of the perennial goals in the world of solar technology and certain companies such as Twin Creek Technologies are working on making thinner monocrystalline silicon wafers. Making thinner polycrystalline silicon wafers is trickier because they are more likely to break.
Despite a plan to move part of its production to China, Evergreen couldn’t reduce its manufacturing costs quick enough to compete in a market that has seen a big fall in solar panel prices. It didn’t make the most efficient solar panels or branch out of manufacturing business to include installation, as some manufactures have done in seeking fatter profits. When there is a greater supply than demand, as has been the case in the global solar market over the past year, companies that can’t compete on price or do not have the financial means to weather the tough times will not survive.
Talks of Sovello’s bankruptcy filing began to swirl over the weekend when a German newspaper reported that the company was cutting back production by a third and on the brink of bankrtupcy. The fate of it's 1,250 employees is unknown at this time.
The tough times have caused many other companies to file for bankruptcy since the beginning of 2011, including SpectraWatt, Solyndra, Solon, Energy Conversion Devices (Uni-Solar).
Solar manufacturers have hoped to leave the imbalance of supply and demand behind them when 2011 came to an end, but major companies, such as First Solar, SunPower and Canadian Solar, have continued to post losses so far this year. Europe, though the largest market, also is seeing some major policy shifts that could slow its growth. Some analysts and solar company executives have hoped that fast-growing Asian markets such as China, India and Japan could offset the slower growth in Europe. SMA Solar, a big inverter supplier, said it’s too early to say whether emerging markets will make up for the difference.