Abound Solar, a solar panel maker that received a $400 million loan guarantee from the federal government, announced on Thursday that it would file for bankruptcy amid plummeting prices and intense competition from Chinese manufacturers in the solar equipment market.
The failure of Abound, which tapped about $68 million of the loan guarantee before the Energy Department cut off its credit last September, comes after the collapse last year of Solyndra, another high-tech solar panel maker that had received federal funds.
Republicans, including Mitt Romney, the presumptive Republican presidential nominee, seized on Solyndra’s failure as evidence that the Obama administration wa`s wasting taxpayer money by supporting clean energy companies.
Abound Solar, of Loveland, Colo., with manufacturing in Tipton, Ind., had been struggling for months. In February, it announced it was closing its factory to conserve resources while it tried to start production of a more advanced product. The company produced panels that made electricity directly from sunlight using a chemistry called cadmium telluride, which was intended to have a cost advantage over the more common silicon cells. But that cost advantage eroded as silicon cells plunged in price.
Abound said it would file for bankruptcy next week and dismiss its 125 employees. The company said it could have been profitable if it had had large-scale manufacturing under way, but “aggressive pricing actions from Chinese solar panel companies have made it very difficult for an early stage start-up company like Abound to scale in current market conditions.”
Analysts agreed that a global oversupply of manufacturing capacity was making life very tough for solar panel makers.
“The less cost-competitive vendors are exiting the market,” said Amir Rozwadowski, an analyst at Barclays. “In the near term it’s going to be painful for vendors that aren’t cost-competitive.”
Other American manufacturers of solar panels brought a trade case against Chinese manufacturers, claiming the Chinese government had improperly subsidized them, and won substantial tariffs on the Chinese firms.
Abound had used about $68 million of the loan guarantee by last September, when the Energy Department cut off its credit. That was about the same time that Solyndra, a solar equipment manufacturer, closed. Solyndra drew down nearly all of its $535 million loan guarantee before it failed.
Another company, Beacon Power, which built a new kind of energy storage system to stabilize the power grid without adding to air pollution, went bankrupt a month after Solyndra. But its assets were bought and the department said it expected to recover 70 percent of the $43 million loan that it guaranteed.
In the Abound case, the Energy Department said it expected to recover some of the $68 million.
The Energy Department’s grant and loan guarantee programs were intended to stimulate employment, foster nascent industries that were likely to be important in the future, and counteract the credit freeze.
A123 Systems, a manufacturer of batteries for electric cars, received a $249 million grant from the Energy Department but has laid off some workers and acknowledges that it faces serious challenges.
Fisker Automotive, which is building electric cars, received a $529 million loan guarantee but had to lay off some workers at its factory in Delaware early this year.
Republicans have criticized the program setbacks.
“Our government is not good at picking winners and losers in the marketplace but has certainly proved it is good at wasting taxpayer dollars,” Jim Jordan, Republican of Ohio and chairman of the House Government Reform and Oversight Committee’s subcommittee on regulatory affairs, stimulus oversight and government spending, said on Thursday.
The Energy Department released letters it received in 2009 from members of Congress from Colorado and Indiana urging it to grant the loan guarantee. Four Indiana Republicans — Senator Richard G. Lugar and Representatives Dan Burton, Mike Pence and Mark Souder — were among the signers, as were Indiana’s Democratic senator, Evan Bayh, and several Colorado Democrats.
Source: http://www.nytimes.com/2012/06/29/business/energy-environment/abound-solar-says-it-will-file-for-bankruptcy.html
The failure of Abound, which tapped about $68 million of the loan guarantee before the Energy Department cut off its credit last September, comes after the collapse last year of Solyndra, another high-tech solar panel maker that had received federal funds.
Republicans, including Mitt Romney, the presumptive Republican presidential nominee, seized on Solyndra’s failure as evidence that the Obama administration wa`s wasting taxpayer money by supporting clean energy companies.
Abound Solar, of Loveland, Colo., with manufacturing in Tipton, Ind., had been struggling for months. In February, it announced it was closing its factory to conserve resources while it tried to start production of a more advanced product. The company produced panels that made electricity directly from sunlight using a chemistry called cadmium telluride, which was intended to have a cost advantage over the more common silicon cells. But that cost advantage eroded as silicon cells plunged in price.
Abound said it would file for bankruptcy next week and dismiss its 125 employees. The company said it could have been profitable if it had had large-scale manufacturing under way, but “aggressive pricing actions from Chinese solar panel companies have made it very difficult for an early stage start-up company like Abound to scale in current market conditions.”
Analysts agreed that a global oversupply of manufacturing capacity was making life very tough for solar panel makers.
“The less cost-competitive vendors are exiting the market,” said Amir Rozwadowski, an analyst at Barclays. “In the near term it’s going to be painful for vendors that aren’t cost-competitive.”
Other American manufacturers of solar panels brought a trade case against Chinese manufacturers, claiming the Chinese government had improperly subsidized them, and won substantial tariffs on the Chinese firms.
Abound had used about $68 million of the loan guarantee by last September, when the Energy Department cut off its credit. That was about the same time that Solyndra, a solar equipment manufacturer, closed. Solyndra drew down nearly all of its $535 million loan guarantee before it failed.
Another company, Beacon Power, which built a new kind of energy storage system to stabilize the power grid without adding to air pollution, went bankrupt a month after Solyndra. But its assets were bought and the department said it expected to recover 70 percent of the $43 million loan that it guaranteed.
In the Abound case, the Energy Department said it expected to recover some of the $68 million.
The Energy Department’s grant and loan guarantee programs were intended to stimulate employment, foster nascent industries that were likely to be important in the future, and counteract the credit freeze.
A123 Systems, a manufacturer of batteries for electric cars, received a $249 million grant from the Energy Department but has laid off some workers and acknowledges that it faces serious challenges.
Fisker Automotive, which is building electric cars, received a $529 million loan guarantee but had to lay off some workers at its factory in Delaware early this year.
Republicans have criticized the program setbacks.
“Our government is not good at picking winners and losers in the marketplace but has certainly proved it is good at wasting taxpayer dollars,” Jim Jordan, Republican of Ohio and chairman of the House Government Reform and Oversight Committee’s subcommittee on regulatory affairs, stimulus oversight and government spending, said on Thursday.
The Energy Department released letters it received in 2009 from members of Congress from Colorado and Indiana urging it to grant the loan guarantee. Four Indiana Republicans — Senator Richard G. Lugar and Representatives Dan Burton, Mike Pence and Mark Souder — were among the signers, as were Indiana’s Democratic senator, Evan Bayh, and several Colorado Democrats.
Source: http://www.nytimes.com/2012/06/29/business/energy-environment/abound-solar-says-it-will-file-for-bankruptcy.html
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