Solon files for insolvency

Overall, the company has filed for insolvency for Solon Photovoltaik GmbH, Solon Nord GmbH and Solon Investments GmbH.

The company says that despite its efforts over the past few months to financially restructure its operations, which included holding discussions with investors, financial institutions and guarantors, "negotiations on an amicable solution failed".

"Solon will now use the opportunities for a restructuring within the insolvency proceedings," said the company in a statement. A spokesperson declined to comment further on the matter, but did say that more information would be released shortly.

In August, Solon announced that it had closed its Tucson module and photovoltaic system manufacturing facility, as part of a new U.S. operations strategy. At the time, 60 redundancies were made. Then in November, the company posted poor third quarter figures, with group revenue having declined by 11 percent, from €402.9 million in the first nine months of 2010, to hit €358.2 million. Its EBIT also suffered a massive loss, having fallen from €-5.5 million in the first nine months of 2010, to a very negative €-113.8 million in the period under review.

In July, solar cell production company, Blue Chip Energy GmbH, of which Solon held an 18.28 percent share, also filed for insolvency.

Consolidation

Solon’s insolvency announcement is just one of many, which have been made public this year. Others include: Evergreen Solar, Solyndra, Beacon Power and SpectraWatt in the U.S.; and Signet Solar and Arise in Germany.

Additionally, companies like REC, Conergy, SolarWorld, Colexon, Energy Conversion Devices, Q-Cells, MEMC and SunLink have all announced production cutbacks and/or job losses, serving to demonstrate just how hard this year is turning out to be.

This period of "painful consolidation", as described by Bank Sarasin, while tough, is not unusual. Furthermore, analysts at the bank state that, overall, it will have an ultimately positive impact on the global solar industry, despite the fact some companies are "bound to fail".