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[Global Times Special Correspondent Wang Pinzhi, Global Times Reporter Yang Shuyu] According to US media reports, the US photovoltaic industry, which has developed rapidly in the past 10 years under the incentive of subsidy policies, is experiencing a huge wave of "bankruptcy" impact. The surviving US photovoltaic companies are also facing tremendous operating pressure, and this wave of impact seems to continue in the second half of the year.

Employees of a solar power company are installing a photovoltaic system in Lafayette, California, USA. (Visual China)

Giants fall one after another

Photovoltaic Magazine USA reported on July 19 that on July 19, Eastern Time, the US solar giant residential solar company SunPower suddenly collapsed, plummeting more than 57% during the session, and the cumulative decline in a week reached 75%.

According to Reuters, SunPower has notified employees that it will suspend several core businesses. The company said in a statement to Reuters: "It is working to resolve the company's financial situation." The solar giant's stock price has been falling since the beginning of 2021.

This is the third US photovoltaic company to go bankrupt in the past month. A few days ago, US photovoltaic manufacturer Toledo Solar also announced that it would immediately terminate all research and development work and gradually stop operations, and the company was about to go bankrupt. On June 28, Titan Solar Power, one of the largest residential photovoltaic installation manufacturers in the United States, also announced that it would permanently close down. Last year, it ranked sixth in the country's residential photovoltaic market.

Last month, Time magazine reported that "the entire photovoltaic industry is facing major turmoil." In addition to the three large companies mentioned above, many relatively small companies have also declared bankruptcy this year, including Infinity Energy, Solcius and Kayo Energy. According to statistics from the US Photovoltaic Insurance Network, a total of 16 large photovoltaic companies in the United States have closed down since last year. In 2023 alone, more than 100 photovoltaic companies in the United States have gone bankrupt.

"Cold Wave"

Photovoltaic Magazine USA analyzed that the U.S. residential solar market has been struggling over the past two years. Affected by rising interest rates and a weak market, solar installers have been dealing with the challenge of excess inventory. In 2024, national installations will drop by 20%. According to a forecast by Roth Capital Partners, more than 100 residential solar companies in the United States will face bankruptcy.

SunPower's predicament continues against the backdrop of high interest rates in the United States. As early as 2023, the company was reported to have defaulted on its debts and had "ongoing concerns" about continuing to operate. Until recently, Guggenheim Securities urgently lowered SunPower's target price to $0. "In fact, this marks the end of SunPower as a solar operator," the analyst wrote in the latest report.

Analysts believe that in the past 10 years, technological advancement has driven down costs and the government has introduced stimulus policies that have helped the U.S. photovoltaic industry grow rapidly. The photovoltaic industry is a key industry supported by the United States. In August 2022, the Biden administration signed the Inflation Reduction Act, proposing a plan to distribute $369 billion over 10 years to address climate change and improve energy security, including subsidies for new energy industries such as photovoltaics and support for local companies. Despite this, since last year, high interest rates, tighter financing, fierce market competition, and the decline in stimulus policies by some state governments have led to a "cold wave" in the U.S. photovoltaic industry.

Last year, California, the largest solar market in the United States, began implementing the NEM 3.0 electricity pricing system, which reduced the rewards that households and businesses could receive for supplying excess solar power to the grid, further dragging down demand for rooftop solar installations in the state. Other states are following California's lead.

Due to the high interest rates in the United States pushing up installation costs and the adjustment of incentive policies, the demand for photovoltaics is sluggish and the number of new customers has continued to decline. The number of solar panels installed on rooftops in California has plummeted by 80%. Data from the California Solar and Energy Storage Association shows that thousands of installation projects have stalled, companies' net losses have widened, some large photovoltaic companies have gone bankrupt, and 17,000 jobs have been laid off in the industry.

In addition, Prabhu, CEO of clean energy consulting firm Mercom Capital Group, said that uncertainty about the U.S. government's policy support for the industry during the U.S. election is also causing investors' interest to stagnate and further increasing companies' debt burden.

American companies have also begun to hesitate in building new photovoltaic projects. Reuters reported last year that as many as half of the photovoltaic factories announced to be built in the United States have not been built. Convalt began building a new photovoltaic factory with a total capacity of 10 gigawatts in northern New York in 2022, but as competition in the global photovoltaic market intensified and panel prices plummeted, the construction of the factory has been stagnant for a year.

Entering a period of restructuring?

Analysts believe that although the Biden administration is adopting the Inflation Reduction Act to subsidize the U.S. photovoltaic market, a business model that relies solely on subsidies is difficult to sustain. Coupled with the new U.S. tariffs on Chinese photovoltaic products, photovoltaic products with the most complete global industrial chain and the lowest prices cannot enter the U.S. market smoothly, and manufacturing costs remain high. The U.S. residential solar market may still face pressure.

Zhang Sen, Secretary General of the Solar Photovoltaic Products Branch of the China Chamber of Commerce for Import and Export of Mechanical and Electrical Products, said in an interview with the Global Times on the 21st that the closed market has greatly pushed up the consumer price of the US photovoltaic market, causing the price of photovoltaic installation in the United States to be more than three to four times that of other countries, resulting in increased inflationary pressure on photovoltaic installations, weakened demand, and a large number of corporate bankruptcies. This has also inhibited the large-scale application and development of the US photovoltaic industry and even the renewable energy industry.

The U.S. photovoltaic industry hopes that the current difficulties are temporary and that the subsequent environment will improve. Some optimistic analysts believe that 2023 to 2024 can be regarded as the "recovery, reorganization and consolidation period" of the U.S. photovoltaic industry, and from now on, the U.S. photovoltaic market may see a "stable construction period". It is worth noting that the U.S. interest rate level is expected to fall by the end of this year, which will stimulate users' demand for procurement and installation, and thus play an important role in the recovery of the U.S. photovoltaic industry. A survey by Forbes found that 90% of U.S. residential photovoltaic equipment installers are satisfied with the installed systems. The main reason for household users to choose to install photovoltaic equipment is to achieve energy self-sufficiency, followed by cost savings. The above survey data also reflects that the fundamentals of photovoltaic demand are still strong.