April 25, 2016 | By Barbara Vergetis Lundin

While SunEdison filing for bankruptcy protection has shocked the industry, it is not expected to affect solar fundamentally, according to consensus across the industry.

Last week, SunEdison filed for (and was granted on an interim basis in some cases) chapter 11 reorganization (bankruptcy) to restructure its balance sheet.

The bankruptcy filing under chapter 11 permits SunEdison's reorganization under court supervision while continuing to operate in accordance with any agreement reached with debtor-in-possession lenders, in order to maximize value for all stakeholders.

"Our decision to initiate a court-supervised restructuring was a difficult but important step to address our immediate liquidity issues," said Ahmad Chatila, SunEdison chief executive officer. "The court process will allow us to right-size our balance sheet and reduce our debt, providing the opportunity to support the business going forward while focusing on our core strengths. It also will facilitate our continued work towards transforming the company into a more streamlined and efficient operator, shedding non-core assets as well as taking other steps to help us get the most value out of our technological and intellectual property."

As a result of this process, SunEdison says it expects to be "in an even better position over the long term to utilize our capabilities in the renewable energy sector in service of our customers, business partners, and employees."

But what does the filing signal to the solar industry? It, perhaps, says more about the company itself than the industry overall.

"SunEdison's bankruptcy says more about the company's strategic decisions than about the solar industry as a whole. Comparable companies SunPower and First Solar have managed a develop-and-sell business profitably over the past three years," said Bloomberg New Energy Finance Head of Solar Insight Jenny Chase. "What has distinguished SunEdison has been the relentless and unfocused pursuit of growth, in which it has invested vast amounts of borrowed money."

The bankruptcy filings will mainly affect direct suppliers and partners, not the global PV supply chain, according to IHS.

"Having the Chapter 11 filing on the table starts the process to settle SunEdison's future. Questions have piled up regarding SunEdison's assets, project pipeline and joint ventures across the world. It will take all of 2016 to untangle this giant's complex business structure, attained from its aggressive expansion over recent years," said Josefin Berg, senior analyst of solar demand at IHS. "SunEdison has built substantial pipeline in emerging PV markets."

IHS estimates that that SunEdison owns approximately 0.7 GW of operating PV systems globally, not including those owned by Terraform (SunEdison's publicly-traded yieldcos, which are not part of the filing), with the total PV pipeline extending to 7 GW spread across the Americas and Asia. IHS ranks SunEdison as the second largest PV developer after Enel Green Power.

Chapter 11 proceedings could potentially offer opportunities for investors to buy late-stage projects, IHS notes.

So is anyone waiting in the wings for the opportunity to buy what's left of SunEdison? It doesn't appear so -- at the moment.

"As part of ongoing restructuring, SunEdison idled its Pasadena polysilicon plant at the end of 2015 and entered into an agreement to sell its Malaysia wafering facility to LONGi," said Edurne Zoco, senior research manager, Solar Supply Chain at IHS. "The closing of its polysilicon Pasadena plant and increased uncertainty over the future of SunEdison's polysilicon facility in South Korea, which further reduce the already stalled polysilicon manufacturing base, raises additional concern over the global polysilicon demand-supply situation in 2016."

The industry, overall, is convinced that this does not foreshadow things to come -- and will definitely not stop the rise of solar power, which has, thus far, ushered in an era of energy convergence with technologies that are becoming both proven and economical in applications from rooftops to oilfields.

"…a negative outlook of the solar industry as a whole is misguided, as the fundamentals of distributed generation solar have never been better: electricity rates continue to rise and solar continues to get cheaper," Conlan O'Leary, CEO of Sighten, said. "Much of the recent turmoil can be attributed to a maturation and disaggregation of the solar value chain as capital and technology are democratized by new financing products and independent software tools. We're seeing a more level playing field emerge and companies without a focused strategy and clear value proposition will face significant challenges."

In a nutshell, SunEdison, apparently couldn't take the heat of a highly competitive industry.

"As with other rapidly growing and successful industries, not every company in the solar market is going to stand the test of time. SunEdison is just one company and today's development does not reflect a trend of the broader industry," said Dan Whitten, vice president of Communications for the Solar Energy Industries Association. "The solar industry is growing at warp speed. It took us 40 years to get to 1 million installations (which we have just done) and it will take us just two more years to hit 2 million and that, I think, illustrates the direction of the solar industry."

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