Silex Solar Closes its Doors and Blames Usual Suspects

Somewhere in between the strenuous media frenzies that accorded the visit of The Windsors and later the Obamas, the Australian media managed to find time to report on the final demise of the (previously) only manufacturer of solar cells in this country.

The Homebush, NSW-based SilexSolar company — previously associated with BP — finally closed its doors this week with the loss of 45 jobs. The news was another body blow to the NSW solar industry which has seen a number of setbacks under the O’Farrell Government.

Sad Silex Solar

For full details of the collapse, see this Sydney Morning Herald article.

Silex chief executive Michael Goldsworthy blamed the usual suspects for the company’s demise doors including an oblique reference to ”… we think we’re seeing dumping” (read China solar panel production here). An interestingly-titled “Interim Operational Update” issued by Silex on the 15th November didn’t hold back.

“Since [the original decision to end production of Australian-made cells], the Australian PV panel market has continued to deteriorate. Sales volumes have been decimated by the abandonment of reasonable support policies from various governments, and panel prices have plummeted under the strain of a massive oversupply across the global PV market. The high Australian dollar has completed a trifecta of negative market factors for SilexSolar.”

Intriguingly the “operational update” referred to the company being placed in “‘care and maintenance’ mode until the future direction of the business can be determined.”

This correspondent thought this part appears to have a touch of science fiction about it. Is the company to be placed in cold storage and sent magically to another time and place only to return at the end of the O’Farrell Government’s tenure? And at a time when the dollar is at a more advantageous level for solar cell exports. Can’t wait for the mini series.

Back on Planet Earth, it is becoming clear that solar cell competition from Chinese solar companies is making life difficult, if not impossible, for Western manufacturers of solar panels. And the allegations of dumping, mentioned previously, are not just restricted to grumpy Australian solar panel manufacturers.

A number of US solar companies, the latest and most spectacular being Solyndra, have blamed the prevalence of cheap Chinese solar cells for their early end. However this may be in accord with the wider game of larger solar manufacturers. Indeed Jifan Gao, chief executive officer of the China-based, solar giant Trina seemed to describe the flooding of the global market with cheap Chinese PV technolgy as just the beginning.

“This is the decade of mergers and acquisitions,” said Jifan in a recent Bloomberg interview. “From now until 2015 is the first phase, when about two-thirds of the players will be shaken out.”

The Trina CEO added that China had a far better advantage at the cost level because of better management and a demonstrated ability to react faster to changing markets.

The beginning of the end? Or the end of the beginning of the end? Your thoughts?

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  1. I co own Sunpower Solutions. We are a solar company in South Jersey. I can tell you that the aevrage cost for a system under 7Kw, is $7. 95 per watt. What people fail to realize, is that there is a lot more that goes into a PV system than just panels. Racking, hardware, combiner box, inverters, labor to put the panels up, pay the electrician that ties it all together, the architect that measures the wind load on the panels, etc. It’s not cheap. Although, in the state of NJ, the the amount of time it takes for the system paying for itself, is 4 years. It doesn’t matter if it’s a huge system or the smallest PV system, it’s 4 years. Any questions, just ask. @Martin:The thing with those programs, is that the company that is leasing the system, is taking advantage of the renewable energy credit that the system is producing. Yes you get cheap electricity, but you are not taking advantage of the money making ability of the renewable energy credits.

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