Another piece of bad news for the solar world. Norway’s Renewable Energy Corp. (STO: RECO) is ceasing all funding and will be filing for bankruptcy for its sole manufacturing facility. All production of silicon wafers at the plant has also been halted.
As of the end of July, REC Wafer Norway AS had liabilities in excess of assets to the tune of almost $203 million. That meant the unit could only achieve solvency through more expense on part of REC.
The combination of a strong Norwegian krone and falling prices for the raw components of solar cells is hurting REC. So far, their shutdowns have meant around 700 lost jobs. The majority of the remaining 600 personnel at the wafer plant also stand to lose their positions by this year’s end.
“Although we had looked for potential savings of up to about 1 billion kroner, we believe the news is positive as REC has been somewhat vague when discussing this topic in the past,” Pareto Securities ASA said in a note to clients. The move will save REC about 800 million kroner, it said.
Fortunately, despite this bankruptcy for REC Wafer Norway, the company’s main solar and silicon units will continue operations. It will keep making polysilicon in the U.S. and solar modules in Singapore.
The news caused REC shares to rise around 5.4 percent and trade 3.4 percent higher, Bloomberg reported. That’s fairly good for a company whose shares had fallen to almost 97 percent below what it started out at six years ago.
Chinese manufacturers of solar components ramped up operations right as international demand slowed, thus crashing the price of these components. Moreover, France, Italy, and Germany have all cut subsidies to curb the solar installation boom, and that has contributed to reduced demand, thereby placing European solar manufacturers under excessive pressure.