The U.S. photovoltaic (PV) industry is currently facing a "bankruptcy wave."
On July 19th, Eastern Time, SunPower, a veteran U.S. PV manufacturer, saw its stock price plummet by over 55% in a single day, with a cumulative weekly decline of 75%, reaching an all-time low of only $0.6793.
It is reported that SunPower, founded in 1985, is a well-established solar giant in the United States and had already gone public on NASDAQ as early as 2005.
Why did the stock price of this veteran solar giant plummet? With the collapse of three giants within a month, what is happening to the U.S. photovoltaic industry? After a decade of containment, the China-U.S. photovoltaic dispute has reached a final outcome.
Today, let's discuss the "bankruptcy wave" in the U.S. photovoltaic industry. Writing is not easy, so welcome likes, shares, and bookmarks.
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The U.S. photovoltaic industry encounters a bankruptcy wave.
The collapse of SunPower's stock price this time originated from a letter.
According to media reports, on July 17th, local time, SunPower sent a letter to its distributors stating, "The company no longer supports new lease and power purchase agreement sales, nor does it support the installation of new projects and has ceased shipments. The company is unable to provide installation services for goods in transit and those that have been delivered."
In other words, SunPower's business has essentially come to a complete halt, and the company has effectively ceased operations.After the exposure of the letter, Wall Street analysts generally believe that Sunpower is only one step away from bankruptcy, with Guggenheim Securities even directly downgrading its target price to $0.
The more serious issue is that this is the third major American photovoltaic (PV) giant to fall in the past month, with U.S. stocks in the PV industry facing an unprecedented "bankruptcy wave."
On July 16th, Toledo Solar, a U.S. photovoltaic manufacturer, announced that it would immediately terminate all research and development work and gradually cease operations, with the company on the brink of collapse;
Earlier, on the 28th of last month, Titan Solar Power, one of the largest residential photovoltaic installation companies in the U.S., also announced a permanent shutdown.
Of course, these are all major companies that can be ranked in the U.S. photovoltaic industry, and there are countless other "small fry" that have gone bankrupt.
According to statistics from the U.S. Photovoltaic Insurance Network, last year alone, more than 100 photovoltaic companies in the U.S. went bankrupt, including 16 large photovoltaic enterprises.
More than 100, what does this mean?
The number of photovoltaic companies that went bankrupt in the U.S. over the previous three years, when multiplied by six, barely reaches this figure.
And even so, some institutions predict that more than 100 photovoltaic manufacturers in the U.S. have already reached the edge of a cliff, on the verge of bankruptcy.
Why the collapse?A cold wave is hitting, and American photovoltaic companies are collapsing overnight, mainly for two reasons.
Firstly, the reduction of subsidies has sharply increased the operational pressure on these photovoltaic companies.
Many people might know that Biden is a staunch supporter of new energy and has made numerous efforts to support American new energy companies.
For example, in August 2022, Biden signed the Inflation Reduction Act, planning to allocate $369 billion over 10 years specifically for subsidies to photovoltaic and other new energy companies.
However, plans are not as fast as changes. In April last year, California, the largest photovoltaic market in the United States, introduced a new policy—NEM3.0.
What does NEM3.0 mean?
In simple terms, it means that previously, if American households installed photovoltaic power generation and had surplus electricity, they could sell it back to the grid at retail prices, but now that's not possible. Even with surplus electricity, they can only sell it at wholesale prices, and the price has plummeted by 75%.
It's imaginable that with the sudden decrease in revenue, the appeal of photovoltaic power generation has naturally decreased significantly, and the performance of photovoltaic companies is also under pressure, leading to bankruptcy when they can no longer sustain.
Secondly, the Federal Reserve's frantic interest rate hikes over the past two years are also one of the reasons.
Similar to China's photovoltaic installation methods, American households mainly have two schemes for installing photovoltaics:One is that ordinary people do not have to pay a penny from their pockets; all installation costs are covered entirely by loans.
Two is that ordinary people sign a lease agreement, where the installer bears the installation costs while owning the photovoltaic system and can apply for a 30% investment tax credit.
The key issue here, however, is that regardless of which plan is chosen, it will be affected by the interest rates on loans.
Under the Federal Reserve's aggressive interest rate hikes, U.S. loan interest rates remain high, leading to a significant increase in loan costs. This not only results in a decrease in consumer demand for the photovoltaic industry but also puts cash flow pressure on the operations of photovoltaic companies themselves.
Poor management and cash flow breakdowns inevitably lead to bankruptcy.
After a decade of containment, the Sino-American photovoltaic competition has reached a conclusion.
Once upon a time, the United States was the leader in the global photovoltaic industry, employing every possible means to curb the development of China's photovoltaic industry.
As early as 2011, the U.S. initiated "countervailing" and "anti-dumping" "double anti" investigations on Chinese photovoltaic products.
In the following years, the U.S. significantly increased tariffs on Chinese imported photovoltaic products, suppressing China's photovoltaic industry in various ways.
But after more than a decade of containment, the ultimate result was that the U.S. lost its position as the global leader in the photovoltaic industry, while China's photovoltaic industry transformed and became the global leader in photovoltaics.Including this recent wave of bankruptcies among American photovoltaic (PV) companies, it can actually be said that the U.S. has been the author of its own misfortune.
In the past, to compete with Chinese PV companies, the U.S. established robust trade barriers. Not only did they provide substantial subsidies to domestic PV companies, but they also prevented Chinese PV products from entering the American market.
However, the issue lies in the fact that after so many years of development, China has already built the most comprehensive and lowest-cost global PV module supply chain. Without Chinese manufacturing, the competitiveness of American PV companies plummets instantly.
The reason is straightforward: without Chinese PV modules, your costs are twice as high as others. How can you compete in such a scenario?
Thus, when the U.S. subsidy policies were phased out and interest rates remained high, American PV companies, which already had high operating costs, were severely impacted. Amid weakening demand, a "wave of bankruptcies" emerged.
Looking at the situation now, the decline of the American PV industry seems inevitable, and the competition between China and the U.S. in the PV sector has reached a final conclusion.
In conclusion:
With three giants falling in just one month, the American PV industry is experiencing an unprecedented dark moment.
In the past, when promoting their products, American PV companies often used the slogan "You can save money and save the planet at the same time."
But the reality has proven that if consumers save money, setting aside whether or not they can save the planet, these PV companies are the first to struggle to survive.