The two dueling yet interrelated trends in the industry - more solar installations, more trouble for solar manufacturers - have characterized the state of solar for quite some time now. But the contrast of good news and bad news came into its sharpest focus yet this past month.

In mid-March, the Solar Energy Industries Association (SEIA) released a much-shared, much-cheered report on the remarkable project development growth we saw in 2012. The 3,313 MW of new installations in the U.S. broke records and represented a 76% increase over 2011’s numbers. Reason to celebrate, indeed.

Along with supportive policy measures, inexpensive PV modules contributed to that growth, as SEIA and industry executives acknowledged during a Google+ Hangout discussion held after the report’s release.

Those plentiful, low-priced modules claimed a high-profile victim the very next week. On March 20, Suntech Power Holdings Co. - ranked as the largest solar module manufacturer in the world - announced its primary operating subsidiary in China had filed for insolvency.

The news took few people by surprise, as Suntech has dealt with a wide range of financial woes over the past year, from defaulting on convertible notes to eventually settling with a capital fund that had provided the company with a €500 million bond that didn’t actually exist.

Is Suntech’s collapse good news for the industry? An MIT Technology Review article making the rounds argues that if Suntech - and several more solar companies - fully fade rather than get propped up by the Chinese government, the solar sector will experience restored balance, develop new and better technologies and, ultimately, function better.

Others in the industry insist that mass bankruptcies are never the answer. What do you think? R