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The sales season is on for solar. SpectraWatt, which filed for bankruptcy last month, plans to hold a live auction of its silicon solar factory and equipment in New York on Sept. 28, an auctioneer said Wednesday.
SpectraWatt won’t be the only one. California-based Solyndra, which filed for bankruptcy Tuesday, is looking for a buyer so the company could stay intact and re-start manufacturing instead of being sold off bit by bit. Q-Cells, a public Germany company that is among the top 10 solar cell makers in the world, has indicated it would welcome acquisition offers. SolarWorld, another company from Germany that slimmed down its operations in Germany and the U.S., recently to cut costs, has been getting offers, though it has turned them down so far, reported Bloomberg.
And whatever happened to thin-film solar HelioVolt, which made some noise earlier this year to signal its willingness to sell?
Solar mergers and acquisitions aren’t new, of course. But the bankruptcy filings are indeed rare, and pressure is on for solar companies that haven’t reached that stage to line up wealthy patrons. The solar market crumbled earlier this year when big and government incentive-driven markets such as Germany, Italy, France and Czech Republic cut the subsidies and caused a pile up of solar panels in warehouses.
A number of solar companies have been sold in part or whole this year. SunPower (s SPWRA) sold a 60 percent stake to French oil giant Total, and Fotowatio Renewable Ventures sold its U.S. operation to MEMC Electronic Materials (s WFR). Ascent Solar Technologies (s ASTI) has sold a 20 percent stake to a Chinese conglomerate TFG Radiant Group, which promises to build a factory to make products using Ascent’s copper-indium-gallium-selenide (CIGS) technology.
Meanwhile, both factory equipment makers, Applied Materials (s AMAT) and GT Advanced Technologies (s GTAT), are snapping up companies to expand their product offerings. Applied is buying Varian Semiconductor Equipment Associates while GT has bought Confluence Solar.
The pressure to line up better-funded suitors might be particularly acute for startups. As newer entrants to the market, these companies will need help to fund expansion and technology improvements at the time when bigger solar companies are able to borrow money more readily to do the same, said Nathaniel Bullard, an analyst at Bloomberg New Energy Finance. He noted Stion, a CIGS startup that is building its first big factory in Mississippi, has lined up Taiwan Semiconductor Manufacturing Co. as an investor. TSMC rose to prominence as a foundry for chip startups that couldn’t afford to build their own factories. PrimeStar, a startup making cadmium-telluride solar panels, got General Electric (s GE), which promises to build a 400MW factory to make the solar panels.
“You can reduce cost through optimizations and utilization, but in many cases your cost structure is inherently fixed. You can’t draw blood from a stone,” said Bullard about what a startup can do to survive the crunch. “It’s more likely that strategic partnerships or mergers and acquisition is the way.”