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The World's Largest Renewable Energy Developer Could Go Broke (huffingtonpost.com)

Posted by BeauHD on from the it's-only-a-matter-of-time dept.

An anonymous reader quotes a report from The Huffington Post: There is a "substantial risk" that SunEdison may file for bankruptcy, the world's largest renewable energy developer said in a regulatory filing on Tuesday. The company's fall isn't a referendum on the solar industry as a whole, as much as it is on SunEdison's aggressive growth strategy fueled by excessive debt and financial engineering, analysts say. SunEdison "just thought they were smarter than everyone else," said David Levine, the founder and CEO of Geostellar, a solar energy marketplace that has done deals with the company.
SunEdison loaded up a total of $11 billion in debt to develop or acquire renewable energy projects. The company's shares have fallen steeply since they hit a high of $30 in July. They were at just $1.26 before the filing. The stock immediately dropped another 40 percent when the market opened after the filing, and the company was trading at just $0.59 by Tuesday lunchtime.

18 of 292 comments (clear)

  1. Regardless of the reasons... by fredgiblet · · Score: 4, Insightful

    ...People are gonna claim it's proof that renewables don't work.

    1. Re:Regardless of the reasons... by Anonymous Coward · · Score: 2, Insightful

      Because it is. The taxes from fossil fuels and the economy they fuel are the only thing that makes the Green scam possible.

    2. Re:Regardless of the reasons... by K.+S.+Kyosuke · · Score: 5, Insightful

      Yes, Solyndra and this - the evidence that the market works and bad business plans properly fail.

      --
      Ezekiel 23:20
    3. Re:Regardless of the reasons... by Anonymous Coward · · Score: 5, Insightful

      ...People are gonna claim it's proof that renewables don't work.

      As an electrical engineer that works for a company that installs solar systems, they don't work. Well, when you add the government subsidies, that we all pay for in taxes, they're only bad instead of horrible.

    4. Re:Regardless of the reasons... by EEPROMS · · Score: 5, Insightful

      This has nothing to do with solar panels, in this case the directors (like many retarded MBA's coming out of US universities) went with the 5 year insane growth model that just doesn't work with solar power production. If I was going to blame anyone it would be US universities training students to be bad business managers.

    5. Re: Regardless of the reasons... by pixelpusher220 · · Score: 3, Insightful

      It's really hard to compete in an unfair market. When your competition is given 10s of billions in tax breaks annually and allowed to pollute with impunity... Those gov subsidies to solar are pennies in the dollar compared to what Fossil fuel gets every single year

      --
      People in cars cause accidents....accidents in cars cause people :-D
    6. Re: Regardless of the reasons... by Anonymous Coward · · Score: 2, Insightful

      This. I'm in Seattle and moss growth has completely ruined my panels even with the 30% (IIRC) federal tax credit I got. So far this year I've only sold back about $200 worth of power. It takes a hell of a longtime to pay off my $20k investment at that rate. I have to get on my roof and power wash almost monthly.

    7. Re: Regardless of the reasons... by Anonymous Coward · · Score: 2, Insightful

      Even then considering you only make a few tens of dollars a month in power, you still won't make enough back to pay for the panels before they need replacement.

      For my system, if the panels survive 23 years, I'll finally be out of the red.

    8. Re: Regardless of the reasons... by ooloorie · · Score: 2, Insightful

      It's really hard to compete in an unfair market. When your competition is given 10s of billions in tax breaks annually and allowed to pollute with impunity... Those gov subsidies to solar are pennies in the dollar compared to what Fossil fuel gets every single year

      You got it backwards. Fossil fuels are heavily taxed and regulated. And subsidies to fossil fuels are next to nothing, as opposed to solar, which is heavily subsidized.

    9. Re: Regardless of the reasons... by KGIII · · Score: 2, Insightful

      You might want to read that study and see what they're calling subsidies. Then, with solar panels, how about we discuss the materials and manufacturing methods as well as the material acquisition and the energy consumed in their production. Oh, lets limit those to just the ones in production - not the more esoteric ones slated to come a few years down the road that use even rarer materials that are even more difficult to mine and refine.

      This is not an argument against solar. This is an argument for open and honest discussion.

      --
      "So long and thanks for all the fish."
    10. Re: Regardless of the reasons... by KGIII · · Score: 3, Insightful

      Wait, what?

      You've sold back $200. But, is that *after* you've used what you've needed? If so then, you're paying it off quicker than you think. If your bill was $2000/year and now you're getting $2200 worth of electricity per year (no idea what the costs are there) then you'l have paid for it in less than ten years.

      --
      "So long and thanks for all the fish."
    11. Re: Regardless of the reasons... by religionofpeas · · Score: 5, Insightful

      Price of solar panels has dropped by more than 60% in the last decade, and the end is not in sight. Pretty soon the system you paid with tax breaks will cost less new without tax breaks. On the other hand, price of oil, coal and gas will go up in the future.

    12. Re:Regardless of the reasons... by haruchai · · Score: 3, Insightful

      Have a look at the number of car companies that failed in America alone in the early decades of the industry.
      It's nearly TWO THOUSAND.
      The collapse of a number of greentech companies coincided with a huge economic crisis.
      You might as well argue that finance & banking is an abject failure because of the collapse of Arthur Andersen, Bear Stearns, and nearly 500 US banks.

      --
      Pain is merely failure leaving the body
    13. Re:Regardless of the reasons... by ShanghaiBill · · Score: 3, Insightful

      Have a look at the number of car companies that failed in America alone in the early decades of the industry.

      Or look at the number of semiconductor companies that failed in the 1980s, or the number of "Internet" companies that failed in the 1990s. If a technology is advancing rapidly, it means it is more likely that companies based on that technology will fail. They either can't keep up with the changes, or get left behind with a business model that depends on the tech being expensive, as prices fall. After the shake-out and consolidation, there are usually only a handful of competitors left, with most of the profits going to the single company with the biggest market share (Intel in semiconductors, Microsoft in software, etc.).

    14. Re:Regardless of the reasons... by Coren22 · · Score: 3, Insightful

      Does solar power or wind power pay for its externalities?

      I doubt it as China produces most panels, and they have a great environmental record...

      --
      APK likes to ask for responses to the same things over and over. Maybe he just likes the responses?
    15. Re: Regardless of the reasons... by Anonymous Coward · · Score: 2, Insightful

      Solar and wind are a hell of a lot quieter than a generator is likely to ever be.

  2. Re:Anything to due with expiring subsidies? by Aighearach · · Score: 3, Insightful

    Nice attempt at an underpants gnome, but you left out the ... in the middle.

    At the start you acknowledge that the context is an "aggressive growth plan capitalized by debt," but then you just do some handwaving and end up at "It turn out that in order to install solar panels and make any money doing it, not only do you need a huge subsidy..." which is just a load of crap that doesn't in any way follow from this situation.

    You're just trolling with anti-PV nonsense.

    The only thing this situation proves is that if you use "financial engineering" (as opposed to traditional credit ratings and collateral) in order to get loans, and you fall slightly behind your predicted performance, then you crash and burn very quickly. It says nothing about the profitability of projects that limit themselves to the installation size they can afford based on the collateral that they actually have and normal, non-engineered, honest financials.

  3. Re:in other news barrel price drops to $20 by zapadnik · · Score: 3, Insightful

    The drop in the price of oil is due to:
    1) Saudi Arabia making oil so cheap so that its aggressive rival Iran is weakened 2) Saudi Arabia making oil so cheap to put North American fracking operations out of business 3) North American fracking operations supplying so much oil and gas that the US was poised to be an energy exporter.

    We do live an illusion of a Free Market (voluntary exchange producing win-win trades) because many Governments introduce all sorts of tricks to change the voluntary win-win aspect of mutual benefit to involuntary win-lose exchanges because taxpayer money is used to prop up some politically-favored company, or regulate some of the trades. The Free Market is an ideal that has not existed for a long time. The best we have today are hampered Free Markets, where the economically-illiterate control freak sociopaths that self-select into Government are constitutionally prevented from meddling too much.