Solar energy: fail or future? - China Weekly Hangout

Solar panels to heat hot water at the Tea-Horse Trade Guest House along the Tiger Leaping Gorge trail in Yunnan, China. (Photo credit: Wikipedia)

The unceremonial collapse of Suntech, the Chinese solar energy firm who was previously the darling of the investors, shows that rosy investments can fail. But what went wrong in this case, and how can China profit from the upcoming innovations in solar energy?
China's solar energy has been mostly focusing on the export, not on domestic use. And as investments in solar energy in Europe and the US dropped dramatically, so did the basis of companies like Suntech. But the ambitions are still in place. Can solar energy safely replace more environmental dangers sources like oil, coal, nuclear power and even fracking?

On Thursday 11 April, 4pm CEST, 10pm Beijing Time, 10am EST, the +China Weekly Hangout will discuss the future of solar energy in China. What is its perspective after the failure of Suntech, and what does it need to get solar energy going? You can register for the discussion here , leave your questions and comments at the event page. During the hangout (which can be watched in this space), you can also join the discussing using twitter and Google+ if you add the hash tag #CWHCWH to your messages.
+Chris Brown has already promised to chip in, but we will certainly have more knowledgeable panelists.

The energy security has been on the agenda of the +China Weekly Hangout before. In September 2012 we discussed energy security with +Merritt Cooke and +Richard Brubaker , moderated by +Fons Tuinstra .


In November 2012 +Richard Brubaker and +Fons Tuinstra discussed the recent developments of nuclear power, as China resumed the building of new plants after a moratorium after the Fukushima disaster.

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How Suntech destroyed itself - Ben Cavender

Ben Cavender

Fighting price wars is an art in China to defeat competition. The erstwhile successful solar energy company Suntech showed with a massive default, that strategy can turn against you, tells business analyst Ben Cavender in GlobalPost. 

GlobalPost:

Analysts said Suntech's business model, deliberately pushing down prices to capture larger market share despite narrower profit margins, contained the seeds of its own destruction. 

"What (Suntech) has done is increase supply to the market so much, that they really almost can't sell anything at a profit now," said Ben Cavender, associate principal of China Market Research Group (CMR) in Shanghai. 

Suntech recorded a net loss of $1.0 billion in 2011, from a profit of $237 million in 2010, according to company filings. The firm has yet to report financial results for 2012. 

Once an investors' darling, its New York-listed shares have plunged from a high of $90.00 in early 2008. They closed down 7.81 percent at $0.59 in New York on Tuesday. 

"It is going to be difficult for them going forward," Cavender added. "You might end up seeing a very different company down the road."... 

"Looking at a Chinese company as a potential investment, you really have to be a little more cautious... and decide whether the investment looks as good as it does on paper," said Cavender of CMR.

More in Global Post.

Ben Cavender is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers' request form.

Last summer Ben Cavender discussed the failures foreign companies make when trying to localized in China. Hear about the examples of Gap, B&Q, Dunkin Donut and IKEA.

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• Why champagne is trailing cognac in China -Paul French (chinaherald.net)
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• Customer service key for China sales - Ben Cavender (chinaspeakersbureau.info)
• Going global: tough for food products - Paul French (chinaspeakersbureau.info)
• China's Suntech in $541m default (bbc.co.uk)