Suntech bankruptcy hurts new energy drive

BEIJING, March 21 (Xinhua) -- The bankruptcy of solar panel giant Wuxi Suntech made front page news on Thursday, with many reports looking to the factors that caused the bankruptcy, as well as the bankruptcy's future impact.

Suntech's problems are undoubtedly a heavy blow to the industry and the country's drive to promote new energy. Hopes that were pinned on the sector's rise have been dashed.

On Wednesday, the Wuxi City Intermediate People's Court approved Wuxi Suntech's bankruptcy following a joint application issued by the company's nine creditor banks on Monday.

Suntech is not the first solar energy company to find itself trapped in a debt crisis. Chaori Solar, another leading player in the solar energy industry, ran into debt last December. On Thursday, Chaori reminded its investors that its losses in 2012 may be as huge as 1.3 billion yuan (209 million U.S. dollars).

Generally speaking, none of the companies operating in the solar industry have been in a comfortable position in recent years. It's not a problem that is specific to any one company -- the whole industry is in danger.

Some have criticized Suntech and some other companies for misjudging the market and expanding without measure. But the real reasons behind the crisis lie in the sector's lack of cost-efficiency.

For many years, solar energy companies have had to rely on government subsidies to make profits. However, these subsidies have generally fallen short of the industry's expectations.

Externally, the global economic crisis had a fatal impact on the solar energy industry, especially leading companies that sell most of their products in the international market. Since 2008, major solar markets, including Europe and the U.S., have shrunk dramatically, while anti-dumping and anti-subsidy moves targeting solar energy products have made things even worse.