Current Alarming Situation
The situation of European manufacturers is alarming with Chinese producers dumping their products on the EU market thanks to the extensive support they receive from their government. With the Five-Year Plan, a special focus on developing PV solar industry in 2012 and the goal to become the world leader in solar production within the next couple of years, the Chinese government is currently heavily supporting the Chinese solar industry. Companies can even afford to sell their products at a loss, in the will to meet the governmental goals of increasing global market share.
European manufacturers do not receive such a governmental support shielding them from insolvency. Companies in Europe can only compete by their advantage in innovativeness, new technologies, better quality, affordable production methods thanks to full automatisation and many years of experience, however the magnitude of Chinese undercutting brings those efforts down. Many companies already went bankrupt, many are laying off workers or stepping out of business. If the situation continues and the European producers are not allowed to compete with the Chinese producers at fair prices, the whole industry might cease to exist.
One of the biggest Chinese producers has its debt paid by the municipal government
LDK Solar Co. (LDK), the world’s second- biggest maker of wafers that convert sunlight to power, will have part of its debts paid by the government of the Chinese city in which it is based.
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China’s subsidization of its export drive has enabled the industry to dump product in the EU and capture the majority of the EU market. Chinese goods now account for 80% of the photovoltaic products sold within the EU. European manufacturers are struggling to hold even 13% of their domestic market. Chinese producers are constantly increasing their production capacity while numerous EU manufacturers have declared bankruptcy, closed factories or staged layoffs.
EU solar companies are going out of business due to unfair competition from China. Solar manufacturers have being going bankrupt on a monthly basis around Europe and many important players are considering withdrawing from the solar market. More and more PV solar manufacturers in Europe are currently balancing on the edge of existence; many already had to file for insolvency. After Solar Millenium, Solon and Solarhybrid, Q-Cells now also has declared bankruptcy. Q-Cells was one of the largest manufacturers of solar cells worldwide and also manufactured modules. Photowatt, a well–known manufacturer from France, also filed for insolvency. Other companies filing for insolvency in the last weeks include Centrotherm and Solarwatt.
Many European manufacturers stop producing PV solar products or decide to cut jobs as a first reaction to the critical situation. Schott Solar stepped out of wafer and cell production in January, in June 2012 it announced it will also no longer produce modules concentrating on other business fields, not connected to crystalline solar technology. First Solar also announced in April that it would lay off 1350 employees in Europe, about 2000 jobs were eliminated globally.