China cuts 75% of its solar industry off from easy credit.

China is experiencing a credit crunch.  It is leading to worries between its banks that smell like the start of the US meltdown in 2008 where interbank lending came to a standstill because the banks didn’t trust each other.  So Bernanke had to add liquidity to the system.  China recently had to start doing it as well.

There are 2 ways to address the issue.  One is to add liquidity.  But this leads to food price inflation which is the bane of Chinese central planners.  Those running China try to blame it on short term weather events, etc. but the weather gets better while the prices stay high.  The real problem is money printing.

The other strategy for increasing availability of liquidity (credit) is to reduce credit demand.  If you kill off one sector of the economy then it leaves more credit for others.  So China is now picking winners and losers starting with the solar industry. 

http://asia.nikkei.com/Business/Trends/China-hands-death-sentence-to-75-of-solar-cell-makers

Without all the competition in the industry, expect price rises to occur.  The bottom is in with respect to solar prices IMO.  But that does not mean solar is dead.  In fact, far from it.  I think big profits await the solar industry even as government subsidies collapse.

What will happen now, as I have predicted some time ago would be the case, is that electricity prices will go up. This will drive consumers who used to think solar was expensive to invest in solar production.  All it will take is one good sized rate increase with the promises for more to come in the future and people will go flocking to solar panels en masse.  The beauty of owning your own utility is that it is more difficult for bureaucrats to raise your rates willy-nilly.

If you don't want to become a slave to the system you have to get out of the system in any way possible.  Solar is a great way to start.