SpectraWatt Inc., a solar product manufacturing company has filed for bankruptcy under the Chapter 11 bankruptcy protection. The chief reason behind its bankruptcy is the falling prices of solar panels and consequential losses arising from them.

SpectraWatt’s balance sheet shows creditors worth $38.7 million. It is now contemplating selling all its assets (worth $33.9 million) to meet its liability (deficit not withstanding). The company has stated that it has been suffering owing to intense competition from its Chinese rivals and declining market prices of solar products.

Due to intense competition from Asian companies, SpectraWatt had to reduce its solar panel price which implicated lower profitability and subsequent losses. The Chinese manufacturers are able to produce the solar panels at a much lower cost price since they enjoy some monetary and government support in their country. Thus, the Chinese producers have taken the market by the storm with their competitive advantage over their US counterparts.

SpectraWatt Inc. Is the 2^nd solar company in the US that has decided to shut down in August, 2011. Another reputed concern Evergreen Solar Inc., too, filed for bankruptcy on 15^th August citing failure to match the competitive strength of the Chinese manufacturers.

The technology deployed by both these companies is not good enough to curtail their cost prices by a significant measure to match the lower cost prices of the Asian rivals. Besides, SpectraWatt has also revealed that owing to poor quality of silicon wafers and manufacturing equipment it received from vendors, it was compelled to slash its market prices which led to further losses.

SpectraWatt is keen to hold the auction of its assets on as early as 28^th September before the US market gets flooded with similar solar equipments from other bankrupt companies.