Falling costs and declining government subsidies have left Q-Cells as the latest casualty of turbulence in the global solar market.

The German company said today it would file for insolvency on Tuesday, after acknowledging on Friday that a German court ruling effectively prevented it from executing a plan to swap debt for equity.

“Following an intensive review of alternative concepts for the implementation of the financial restructuring, the executive board has reached the conclusion that a going concern of the company cannot be restored on a sufficiently secure legal basis,” a statement issued today read.

Q-Cells added that it now hopes to work with the insolvency administrator to ensure the continuation of the company under the insolvency process.

At one point the world’s largest producer of solar cells, Q-Cells now finds itself in the same situation as contemporaries Solar Millennium and Solarhybrid, both of which filed for insolvency in recent months, as well as US firms Evergreen Solar, SpectraWatt and, most famously, Solyndra.

The insolvencies in the US and Europe have been caused by a glut of solar panels on the world market, which has forced prices down, coupled with intense competition from low-cost Chinese imports.

A wave of cuts to government subsidy programmes in Germany, Spain and the UK have also undermined demand forecasts this year, while uncertainty over the future of US support programmes have had a similar impact on the other side of the Atlantic.

Q-Cells shares tumbled 35 per cent this morning to its lowest price on record, before briefly recovering to 6 cents on the Frankfurt exchange.

The latest news will spark a fresh wave of debate over the long-term future of the solar sector.

Industry commentators maintain that with solar panel prices continuing to fall fast and experts predicting the technology will be cost competitive with conventional energy sources within a few years the long-term prospects for the sector remain good. Moreover, observers are convinced some consolidation of suppliers remains inevitable in the short term as firms struggle to cope with falling prices.

However, others are seeking to fight back against falling prices, with a group of solar manufacturers in the US recently securing victory in a campaign to get the US government to impose import tariffs on cheap panels from China. Similar action is now expected at an EU level, with manufacturers claiming Chinese competitors are benefitting from unfair subsidies.

In related news, reports over the weekend confirmed the Italian government was planning to follow the UK, Germany and Spain in cutting its feed-in tariff incentives for solar installations.