Altman Z-Score Q3 2016: which PV manufacturers are financially stable?
Altman Z-Score Q3 2016: which PV manufacturers are financially stable?
30 September 2016 

Altman Z-Score Q3 2016: which PV manufacturers are financially stable?

In March this year we released the first Altman Z-Score on, outlining which Asian PV manufacturers are most likely to go into brankruptcy and which PV manufacturers come out strongest.

Since March this year the PV market has changed significantly with an emphasize on oversupply in Q3 & Q4 (see Financial Post, PV-Tech etc.).

The main cause for the oversupply has been this year’s production expansion amongst Asian manufacturers (> 18GW of solar module capacity) and a sudden slow down in demand in China, caused by a cut in subsidies in June.

The current situation looks similar to the boom-bust cycle we’ve seen back in late 2011, which resulted in a wave of consolidation as prices plunged and losses piled up.


Are we in for the next wave of consolidation in our industry?

Seen the turbulent times, we’ve decided to publish a new Altman Z-Score analysis and share which PV manufacturers are now financially strong and which carry the risk of going into bankruptcy.

What happens to solar module warranties when a manufacturer goes bankrupt?

When a PV manufacturer goes bankrupt, its product- and performance warranties will no longer be valid. Valid warranties are important for PV plant developers and PV project owners who want to safeguard their project ROIs. A product warranty is important to cover defects related to the solar module’s workmanship while a performance warranty is important to have in place in case solar module’s degrade faster than anticipated and its output is lower than expected.

One solution to eliminate bankruptcy risk is to purchase a solar module warranty insurance, such as the Solarif warranty insurance.


How to assess the risk of your manufacturing partner going bankrupt, without devoting a complete study on its financial reports?

One proven and fairly quick way to predict if a PV manufacturer may face bankruptcy within the next 2 years is the Altman Z-Score.

To learn more about Altman Z-Score and how it’s calculated, see our previous post.

Q3 2016: how do Asian PV manufacturers rate on the Altman Z-score?

The following table shows the Altman Z-Scores of major, publicly listed Asian, European and American manufacturers at the end of the 3rd Quarter of 2016.


Altman Z-Scores Asian manufacturers September 2016

Altman Z-Scores Asian manufacturers September 2016 (Source:


The Altman Z-scores of major European and American manufacturers such as Solarworld, First Solar and Sunpower have been included to compare their financial state with that of Asian manufacturers.


Click on graph to enlarge:

Altman Z-Score September 2016 graph

Altman Z-Score September 2016 graph


Interestingly, Chinese manufacturer DMEGC Solar Energy is leading the chart and, with a score of 6.49, leaving behind all other PV manufacturers in the graph. DMEGC Solar Energy is part of the Hengdian Group DMEGC Magnetics Co (DMEGC) and has currently 1.6 GW of solar cell manufacturing capacity, 500MW of wafer and 900MW of module assembly capacity.

Other manufacturers in the top ranks are US-American First Solar, Japanese Kyocera and Chinese Risen Energy – the latter two with a higher Z-score than 6 months ago.

Similar to our analysis in March this year, Yingli still ranks at the very bottom with a score of -1.69 (unfortunately further declined, from -1.18 in March 2016). Any company ranked below a score of 1.1 is in the Distress Zone, which means it’s likely to face bankruptcy within the next 2 years. Also companies China Sunergy, Suntech and Renesola are amongst the players at the bottom.


Altman Z-Score and limiting real world factors

In our first Altman Z-Score article we already outlined that while the Altman Z-Score is quite reliable to make proper judgements on the financial shape of a PV manufacturer, there are of course many more and local factors that can come into play in the wake or aftermath of a bankruptcy of a manufacturer.

Such factors can be strategic importance of a manufacturer, number of people employed, unique technologies or intellectual properties, shareholder interests and so on.

Exemplifying the case of China (but also of course applicable to other countries), companies with strategic importance to (local) governments, are likely to enjoy some degree of support when filing for bankcruptcy.

About the author
Dricus is Managing Director at Sinovoltaics Group. Sinovoltaics Group assists PV developers, EPCs, utilities, financiers and insurance companies worldwide with the execution of ZERO RISK SOLAR projects - implemented by our multinational team of solar PV-specialized quality engineers and auditors on-site in Asia. Dricus is based in Hong Kong and has been working in the PV industry in China for 10+ years. Connect with Dricus on LinkedIn



on 4 October 2016

Many solar modules are sold in SL with mis-intepreted warranties of 25 years which is wrong and the manufacturer them selves can go bankrupt less than 2 years ...


Ranjith Prem

on 7 October 2016

Great bench mark info in selecting a reliable manufacturer, This info has significant relevance on varying degrees of product warranties offered by plethora of PV manufacturers. This also arrived at a time I am focussing on Panasonis, Kyocera, REC, TINDO, Q-CELLS, etc. Of course SOLA WORLD a good product apprehensive being overly expensive. Welcome extending this info to other Tier-1 onwards manufacturers & post the publication ASAP. This includes Panasonic, & TINDO in particular at a time I am contemplating on few projects with reasonable product pricing & realistic product warranties. Regards


Sutaik Baik

on 7 October 2016

Very very interesting report


Avinoam Ben Dor

on 8 October 2016

Thank you for publishing this important information.


Craig Donohue

on 11 October 2016

What happened to REC ? they were on the top of the list in your last report.


Alban Thurston

on 26 October 2016

Last week the London Financial Times carried a story that Hanergy Thin Film is attempting - fancifully in many observers' opinions - to resurrect itself. That disgraced manufacturer remains off your scale, I presume?



on 27 October 2016

Hello Alban, glad to add Hanergy for our next quarter's report. It will be interesting to see where it stands. Thank you for your suggestion


Kausiek Banerjee

on 18 February 2017

you have succinctly discussed about the companies of china, us & so on. Kindly discuss about the Indian manufacturers.


Geof Moser

on 27 October 2016

Can you add TaleSun and or the top 10 Chinese Manufacturers by volume?


Greg M

on 1 December 2016

How come LG Solar is not on the list? --They are South Korean based mfr. and I believe very stable. Also I think this list is of limited use....Why only rate Asian mfrs? -We live in a global market place where things are manufactured and sold on a global basis. Further can you explain how you determined what company is financially stable? Also, how do you know the numbers are real and not "cooked" ... this is a particular problem with China companies. Some companies may not have the rigorous auditing of financials like those required of a company going public on American and European company... and even then some of those companies misled the public.



on 16 October 2017

Hi Dricus, Thanks. Any info available on Talesun?



on 1 November 2017

Hi Rob, Talesun is listed on the full AZ report:

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