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Too Big to Succeed: Solar Titans Flop When They Climb to Top

Chris Martin
HUAI AN, CHINA - JUNE 13: An aerial view of the construction site of 40MW photovoltaic on-grid power project of China Huaneng Group on June 13, 2018 in Huai an, China. The first phase with installed capacity of 30 megawatts will be put into operation at the end of June this year. (Photo by VCG/VCG via Getty Images) Photographer: VCG/Visual China Group

A Chinese company called JinkoSolar Holding Co. is now the world’s largest maker of solar panels.

Congratulations. And good luck.

In the past decade alone, four different companies -- all Chinese -- have surged to the top of the heap, becoming the biggest solar maker in the world, only to subsequently fall flat and get overtaken by an up-and-comer.

The rotating cast of characters says a lot about the $161 billion global solar-panel market. China accounts for 70 percent of it, having long pushed its companies to pursue a growth-at-any-cost strategy. But while driving down prices, these companies too often piled on debt to expand rapidly while sticking with aging technology and machinery.

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That strategy may make JinkoSolar vulnerable to emerging Chinese rivals, like Longi Green Energy Technology Co. and Risen Energy Co., as well as to U.S. manufacturers such as First Solar Inc. Aided by President Donald Trump’s tariffs on imported panels and armed with the lowest production cost in the industry, First Solar is poised to grab some of China’s share.

Topping the ranks is “a big honor,” said Sebastian Liu, JinkoSolar’s director of investor relations. Expanding production in the U.S. may help it keep the title by avoiding tariffs. JinkoSolar rose for a third day, gaining 2.3 percent to $14.48 at 12:52 p.m. in New York.

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Dany Qian, global vice president, said JinkoSolar has learned from some of the missteps made by its predecessor and has built a more flexible supply chain as it expanded.

“We are much more conservative in capacity expansion and avoid long-term upstream supply contracts,” Qian said in an emailed statement Friday.

Here’s a look at the changing fortunes of seven Chinese solar makers, based on annual production.

Updates with comment from executive in seventh paragraph.

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