Solyndra case costs Trina US$45 million, can Yingli afford to settle?

Facebook
Twitter
LinkedIn
Reddit
Email

Earlier this week, Trina Solar issued its Q3 results. The highlight was probably the fact that it shipped a record 1.7GW during the quarter but the potentially bigger story that the results could elicit concerns one of its industry peers.

Trina confirmed that it had agreed a settlement of US$45 million with Solyndra over a lawsuit filed back in 2012.

A successor company to the bankrupt US module maker Solyndra alleged that Chinese firms’ unfair trade practices had contributed to its demise. After three years of legal proceedings, Trina decided enough was enough.

“We have entered into a settlement with Solyndra to avoid a burdensome and protracted litigation,” said Trina CEO Jifan Gao this week. “The resolution to the litigation with Solyndra puts this matter behind us and allows us to focus our attention and resources on our business.”

You can almost hear the irritation and contempt: “Pesky lawsuit. Glad to get that out of my in-tray.”

The lawsuit also targeted Suntech (pre-restructuring) and Yingli.

This is where things get interesting. At the time of writing Yingli is scheduled to have its own settlement conference on 4 December 2015. A previous conference on 21 October 2015 failed to find a settlement agreement.

It’s important to stress that comparing Yingli’s settlement with Trina’s is a little dangerous. While the complaint against both companies is the same, inside the settlement negotiations there will by myriad arguments, mitigations and defences that feed into discussions of 'a number'.

The court document alleges “attempted monopolization, conspiracy, predatory pricing, tortious interference, and price fixing” by “an illegal cartel of Chinese solar panel manufacturers”. They are also accused of dumping. This is an accusation that the US Department of Commerce has since found Chinese manufacturers guilty of, resulting in the anti-dumping tariffs it has imposed and upheld.

But while Trina has swatted the case and moved on, Yingli is in a much weaker cash position. It declined to comment on the case to PV Tech so instead we have to look at its circumstances ourselves.

In April 2015 it sold off a plot of land for just short of US$100 million citing the need to raise cash to ensure it could meet looming debt repayments. It’s preliminary Q3 results showed lower than expected utilisation rates. Roth Capital’s Philip Shen noted that the company is looking to preserve cash ahead of the next round of debt repayments. In October it paid RMB643 million of a RMB1 billion repayment due on a 2010 bond. Spare cash to dismiss lawsuits would not appear to be widely available.

While there is no use speculating on the final outcome of next month’s settlement conference or the potential scale of any payout, it is worth noting that debt repayments may not be the only cloud hanging over Yingli.

Yingli is working hard to ensure its cash reserves can meet its debt repayments. Source: Yingli Solar
7 September 2022
The demand for rooftop solar PV is soaring, driven by falling costs of the technology against energy crises that are gripping countries globally. But while an increasing number of households turn to solar to generate their own electricity, there is now a need for more specialist equipment, technologies and services to ensure the solar transition can reach as many customers as possible. Delivering these is now a major challenge for rooftop solar installers. This webinar will analyse the characteristics of the rooftop solar market, discussing how the products, logistics, installation and servicing of solar systems has evolved in line with consumer demands.
15 September 2022
Bifacial PV modules will be the dominant solar PV technology globally within one or two years; in the utility-scale sector, their market share is already above 70%. This webinar will provide a clear view on the successful implementation of bifacial technology, maximizing system performance and minimising LCoE.

Read Next

July 19, 2022
Totalenergies has launched legal action against major solar manufacturer Trina Solar, alleging fraud and breach of contract relating to a 900MW+ module order.
July 13, 2022
Trina Solar said it has achieved a new record efficiency of 24.5% for 210mm p-type monocrystalline silicon PERC cells.
July 12, 2022
Trina Solar will build a 71MW floating PV (FPV) project in the Malaysian state of Sarawak after winning a tender held by the state’s utility, Sarawak Energy.
June 22, 2022
Trina Solar has started construction on a vast new industrial park in the central Chinese province of Qinghai that will cover almost the entire PV manufacturing chain from polysilicon production all the way down to modules.
May 16, 2022
JinkoSolar, Trina Solar and Hanwha Q CELLS are among eight PV manufacturers that have been selected by the US Department of Commerce (DOC) to provide further information on their operations as part of the agency’s ongoing tariff circumvention investigation.
February 7, 2022
Finlay Colville, head of market research at Solar Media, ranks the top 50 module suppliers in the PV industry today, using the proprietary methodology developed at PV Tech, on the back of analysing several hundred companies supplying PV modules over the past 15 years.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
September 7, 2022
15:30 AEST (UTC +10)
Solar Media Events
September 14, 2022
London
Solar Media Events
October 4, 2022
New York, USA
Solar Media Events
October 11, 2022
Virtual event