Some China-Based Solar Firms Are Expected to Shutdown Operations Due to Low Demand

Some China-based solar firms are expected to shutdown operations and exit the market due to low demand. Industry sources indicated the firms that are experiencing problems are those without government support. Firms with government support do not have financial problems. The oversupply condition in the solar market plus the domestic financial crisis in China have been contributing to the financial pressure of China-based solar firms. Some solar firms in locations such as Wenzhou and Zhejiang are rumored to be exiting the market. Beginning in second-quarter 2011, numerous small- and medium-size solar firms in China have faced pressure to suspend operations, said industry sources. The financial problems within China became another force that caused firms to exit the market. However, large-size solar firms in China have also been facing losses. From their financial reports, inventory levels ranged from US$300-500 million. These firms have been benefiting from local government support in obtaining loans from financial institutes, added industry sources. With low prices, large capacity, and high inventory, China-based firms have been surviving due to government help. Source: www.digitimes.com