Why We Need More Solar Companies to Fail

Suntech, a Wuxi, China-based company that as recently as 2011 was the world’s largest producer of solar panels, is teetering on the edge of bankruptcy. It’s running low on cash, owes bond investors half a billion dollars (which it failed to pay Friday), and is saddled with payments on billions of dollars in loans as it struggles to make money in a market flooded with solar panels.

If Suntech fails and shuts down its factories, that might not be a bad thing. Some industry experts say that hundreds of solar companies need to fail to help bring solar panel supply back in line with demand. That would slow the fall in prices and, as demand recovers, allow companies to justify buying new equipment and introducing the innovations that will ultimately be needed for solar power to compete with fossil fuels.