Chinese solar manufacturers have been built on an unsustainable foundation of short-term debt from state-run banks. Companies like Suntech Power (NYSE: STP ) , Yingli Green Energy (NYSE: YGE ) , Trina Solar (NYSE: TSL ) , and LDK Solar (NYSE: LDK ) all have more than $1 billion in debt, an unsustainable amount for companies reporting massive losses.
Chinese solar manufacturers including Yingli Green Energy Holdings Co. (YGE) and Trina Solar Ltd. (TSL) jumped after three separate reports indicated the government is adding financial support for an industry struggling with falling prices.
China allocated 13 billion yuan ($2 billion) in subsidies for domestic solar companies this year, the Xinhua News Agency reported. The Shanghai Securities News said officials may double their target for solar installations. The Ministry of Science and Technology confirmed subsidies for more than 100 developers including Trina and Yingli.