Solar firm Q-Cells burns out

Germany's leading manufacturer of solar cells said in a statement released Monday that it would seek protection from its creditors as it no longer saw any "secure financial basis" for continuing its operations.

Q-Cells would file for insolvency proceedings at the district court in Dessau on Tuesday, the statement said, after failing to find "alternative funding" for restructuring its finances.

"Therefore, the filing for insolvency proceedings is legally necessary," Q-Cells said, adding that its executive board would work with a court administrator to "secure the continuity of the company" during the process.

For 2011, Q-Cells reported the worst result in its history, posting a net loss of 846 million euros ($1.11 billion) - down from a net profit of 18.9 million euros in 2010.

After Solon - Germany's first solar energy company to go public - and solar project developers Solar Millennium and Solarhybrid, Q-Cells is the fourth victim of a dramatic industry shakeout that appears to have accelerated in recent months.

Eclipsed by cheaper competitors

Industry analysts attribute the series of bankruptcies to cheap panel imports from Asia and cuts in incentives for solar power generation in Germany.

Boosted by state funding, Chinese solar firms have recently gained a financial edge over German manufacturers, allowing them to offer solar panels up to a third cheaper.

"The fall in prices in recent months has exceeded our expectations," Frank Asbeck, head of Solarworld - another German solar firm - told the DPA news agency in February.

In addition, the German government has sharply reduced price guarantees for solar energy, with the latest subsidy cut of 30 percent due to come into effect this summer.

"The cuts mean an existential threat to the solar industry," Günther Cramer, head of the solar industry group BSW, told Reuters news agency after the cuts were announced in February.

uhe/sgb (dpa, Reuters, AFP)