Solar Panel Maker Goes Bankrupt

May 16, 2017

SolarWorld, the largest maker of solar panels in the United States filed for bankruptcy last Wednesday. The company received $115 million in state and federal tax subsidies and $91 million in federal loan guarantees. A total of $206 million in subsidies. The company is blaming stiff competition from Chinese solar panel makers. Others in the industry think higher tariffs on Chinese solar panel imports would help stabilize the US market. “China now has managed to circumvent and violate existing trade defense measures in several ways and again incited a ruinous price

race to the bottom, destroying U.S. manufacturing jobs.” However, government money led the industry to over extend itself. When cheaper Chinese solar panels came into the market, subsidized manufacturers in the US could not compete. Government money distorts sound decision making and leads to malinvestment.