Suntech Power Holdings Co., Ltd. (ADR) (STP): Can This Company Stage a Comeback?

However, the recent developments in China promise no good. China has clearly shown that it cannot afford to let its companies go under. In a recent statement, the government of China ordered the energy sector players and lenders to support the debt-wrecked Chinese solar companies. The news had a direct effect on Chinese solar companies’ stocks, which all took went upward.

The impact of government involvement may be more disastrous for the industry, especially outside China. All these events are happening in the wake of conflict between the EU and Chinese solar companies. The companies are accused of benefiting from government subsidies and hence, able to sell solar panels at unnaturally low prices.

The industry battle line has been drawn, and we can only wait and see. Whatever the case, it appears as though the era of the cheap solar panel is coming to an end. The companies that will survive the turmoil in the solar energy industry will have to come up with new innovative technologies to beat their rivals. Nevertheless, that still depends on the will of China to let the market forces determine the prices without giving its companies unfair advantage.

Mike Thiessen has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned.

The article Can This Company Stage a Comeback? originally appeared on Fool.com.

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