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Solar power: Sunset for Suntech

March 27, 2013

Beware of zombies
WILL the bankruptcy of Suntech, a big Chinese solar-panel maker, spark a round of consolidation in the global solar industry? The early signs are dim. Under a charming and tech-savvy founder, Shi Zhengrong, Suntech was a pioneer. It was the first Chinese solar firm to go public, in 2005. Buoyed by official credit and subsidies, it briefly became the world?s largest solar-panel manufacturer by volume.Now Suntech has become a dirty word among sun-worshippers. On March 15th it missed a payment on $541m-worth of convertible bonds. On March 18th local banks holding the firm?s debt lost patience and sued it. Shortly afterwards a local court declared it bankrupt and ordered debt restructuring to begin.Suntech stumbled because it ran ahead of the pack. Jenny Chase of Bloomberg New Energy Finance (BNEF), a research firm, argues that solar technology is advancing so quickly that it creates a ?last-mover advantage?. She calculates that new photovoltaic (PV) manufacturing plants become obsolete within five years.Another advantage for upstarts is that they can exploit the collapse in global silicon prices, the most important raw...

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