The solar industry is spinning out of control.
When Chinese panel companies started taking over the industry — pushing prices down with heavy subsidies, cheap materials, and export insurance — U.S. solar panel manufacturers began to suffer.
In 2011, U.S. solar companies began filing for bankruptcy. Evergreen Solar and the infamous Solyndra were some of the more popular (unpopular?) firms to circle the drain...
So the United States imposed anti-dumping tariffs on Chinese-made panels to turn this around.
These duties started off at 4.73% and more tariffs were added later on top of that — ranging from 31% to as high as 250%.
The U.S. companies wanted to be able to compete in a fair market, and that wasn't possible, they said, with Chinese companies like Suntech Power Holdings (NYSE: STP) and Trina Solar (NYSE: TSL) monopolizing the market...
But now the full effects of the duties are becoming apparent as a number of Chinese solar panel firms admitted this week they were bogged down with debt and needed help getting out of it...
This included companies the U.S. mentioned by name: Trina Solar and Suntech as well as others like LDK Solar (NYSE: LDK) and Yingli Green Energy Holding (NYSE: YGE).
Every one of these companies has watched its shares fall over the past six months:
Low prices have contributed to this, with the cost of manufacturing almost equal to the sale price.
LDK Solar has $6 billion in debt and only $244 million in assets. Suntech might be severely injured by $690 million in fraudulent bonds in addition to its $3.58 billion in debt. Yingli has $3.44 billion in debt. Trina — the healthiest of them all — has $1.08 billion in debt and only $490 million cash on hand.
These are some of China's biggest players; many smaller companies have been forced to stop production or shut down completely. They just can't keep up with the manufacturing costs.
And now they're stuck with an overload of product: U.S. imports of Chinese panels dropped by 60% in June from last year.
European nations aren't buying either, considering the debt crisis.
Our analysts have traveled the world over, dedicated to finding the best and most profitable investments in the global energy markets. All you have to do to join our Energy and Capital investment community is sign up for the newsletter below.
Panel prices are low, but not low enough. And efficiency isn't quite cutting it.
The sun may be setting on China's rule of the solar panel industry...
Of course, the same story is unfolding for U.S. solar companies.
They've been hurt as well.
Surely you recall First Solar's (NASDAQ: FSLR) slump as it struggled and failed to keep up with analysts' estimates.
Even SolarWorld (XETRA: SWV), a German company whose U.S. branch led the push for tariffs on Chinese companies, saw a 70% decline in the past six months:
But solar power is not dead.
Far from it.
Solar remains in high demand as many states and countries set renewable energy goals.
This may be hard to believe after the U.S., which was poised to become a solar leader, fell far behind China — and after China itself fell, too.
But a little-known company could reverse this.
It's not a solar company — but its revolutionary technology could remedy the ailing solar sector.
After solar panel leader China reported devastating blows to the industry, it's clear something has to change...
Once companies get wind of this special process that cuts costs in half and doubles solar's power output, share prices will skyrocket.
Energy & Capital's modern energy guru, Brianna digs deep into the industry with accurate and insightful updates into the biggest energy companies and events. She stays up to date with the latest market moves and industry finds, bringing readers a unique view of current energy trends. For more on Brianna, see her editor's page.
12 Shocking Stocks Making New Highs: The Recession Has Been Very Good to These Investors
When it comes to stock market and economic analysis and predictions, it's been a perennial broken record of fear and loathing for the last five years...
Energy Security Opportunities: OPEC is Finished, Kaput!
OPEC's about to lose its most loyal customer.
The System Is Rigged by Politicians and Bankers: Time to Wake Up
More and more layers continue to be peeled back, exposing central planning and banking for what it is: an internationally rigged game with only the little guy as loser.
Wal-Mart's Bank Account Pays You 5.7%: Why One of My Favorite Investments Is STILL REITs
Find out why REITs have been some of the best performing investments over the last five years...
3D Printing Stocks: The Next Industrial Revolution
Why manufacture something in China, pay workers, and then ship it around the world... when you could just 3D print the object next to its end market?
Mexican Gold Rush: Boom Times Down South, Plus Top Ten Gold Producers
Mexico is the fastest growing gold producer. It's boom time down south. Plus, the top ten gold-producing countries.
Global Nuclear Investment Opportunities: The Government Just Killed America's Nuclear Industry
How to invest from the meteoric rise of the global nuclear market.
Rebirth of a Texas Oil Field: Texas Triple Play
Editor Keith Kohl explains why an old Texas oil field is experiencing a second boom... and how investors can take advantage of this resurgence in activity.
Trillions will be spent to secure the world's energy supply over the next two decades... and all sources are on the table.
Oil, Natural Gas, Solar, Wind. There will be money made.
By signing up, you'll also get our latest report, Six Oil & Gas Steals.