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In China, support for mergers in solar industry

The global solar manufacturing industry has been going through a painful consolidation due to falling prices, a supply glut and slackening demand in key markets. In China, that's a good thing.

The solar manufacturing industry has been going through a painful consolidation due to falling prices, a supply glut and slackening demand in key markets. Dozens of companies, including startups and more established players have met their end or been gobbled up by healthier companies in the past year.

In China, consolidation is the end game. China's government says it will promote mergers among producers of solar panels in an effort to shore up an industry suffering massive losses. The country's State Council said earlier this week it would encourage mergers and acquisitions in the industry, the WSJ reported.

China's cabinet plans to achieve this pro-merger plan by controlling the expansion of new projects to make polysilicon and solar panels, promote electricity-price reform, adjust the electricity feed-in tariff and encourage the use of solar-powered generators, the WSJ reported.

China's cabinet also plans to cut government support to the sector and ban local governments from helping failing domestic solar companies.

Photo: Suntech

This post was originally published on Smartplanet.com