Solar industry faces tough situation

China's solar industry is having a tough time. Overcapacity has led to a large number of panel makers either going bust or struggling to earn meagre profits. A solar panel industrial park in Kaihua county, in East China's Zhejiang province, was once designated as one of the most promising sources for economic growth in the province.

It used to be a busy production center for solar panels. Now, the industrial park built to cater to solar business appears dead. Most of the factories are vacant. No one passes by. No whir of machinery.

Staff member of Huayou Co., Ltd, said, "Our company stopped operation in October of last year. The business climate was worsening, we had to save costs."

Workers say prices for solar panels barely cover the cost to make them. Most of the companies had to move out, due to the high cost of rents. And intense competition in the international market has not improved prospects.

Over 70% of businesses have gone bankrupt, local authorities say. The remaining ones, struggling to survive, are only receiving small orders.

The same thing is happening across China. The world recession lowered global demand, leading to a drastic drop in solar panel prices.

Overcapacity and trade disputes have driven the solar industry, which is one of China's landmark green industries, to the brink of collapse.

The country is scrambling for a solution, at least to ensure the once-booming industry can make ends meet.