WASHINGTON — A California solar-panel manufacturer once touted by President Barack Obama as a beneficiary of his administration’s economic policies — and the recipient of a $535 million federal loan — is laying off 1,100workers and filing for bankruptcy.
Solyndra LLC of Fremont, Calif., is the third solar company to seek bankruptcy protection this year. Officials said today that the global economy as well as unfavorable conditions in the solar industry combined to force the company to suspend its manufacturing operations.
The price for solar panels has tanked in the past year largely because of heavy competition from Chinese firms. The price for solar panels has dropped by about 42 percent this year.
Obama toured the company’s facilities and Guvenator Ahnuld visited last year to highlight the economic benefits of the solar industry and an economic stimulus package that provided seed money for solar startups. At the time, the president said that the new plant being built by Solyndra would employ 1,000 workers.
In a blog posting, Energy Department spokesman Dan Leistikow said that Solyndra was a once promising company that had increased sales revenue by 2,000 percent in the past three years. The loan guarantee was sought by both the Bush and Obama administrations, he said, and private investors put more than $1 billion into Solyndra.
“We have always recognized that not every one of the innovative companies supported by our loans and loan guarantees would succeed, but we can’t stop investing in game-changing technologies that are key to America’s leadership in the global economy,” Leistikow said.
Brian Harrison, Solynda’s president and CEO, said that raising capital became impossible.
“This was an unexpected outcome and is most unfortunate,” Harrison said in a statement.
Solyndra had been in the center of a political controversy in recent months. House Republicans subpoenaed documents relating to the loan from the White House Office of Management and Budget.
Another solar company, Spectrawatt Inc. of Hopewell Junction, N.Y., filed for Chapter 11 bankruptcy on Aug. 19. Its CEO said in the filing that it could not compete with solar manufacturers in China, which receive “considerable government and financial support.”
Spectrawatt’s filing came four days after Evergreen Solar Inc. of Marlboro, Mass., filed for Chapter 11 bankruptcy.
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Massachusetts-based Evergreen Solar today filed for bankruptcy protection, following a month-long sales decline of its solar panel business.
The company, which received millions of dollars in state aid, said it intends to sell off assets of the company, including its proprietary solar cell manufacturing process. As part of the reorganization, Evergreen Solar will lay off 65 people, which will include the closure of a facility in Michigan.
The chapter 11 bankruptcy filing is part of the company's efforts to reorganize its business around making silicon wafers that are converted into solar cells and fitted into solar panels. Global competition, particularly providers from China, have forced rapid price declines in solar modules, or panels, over the past few years.
"Since January, Evergreen Solar has been aggressively repositioning itself to fully leverage the potential our String Ribbon wafers can bring to high-volume solar cell and module manufacturers as these customers are facing severe pressure to further reduce their total cost of manufacturing and particularly their wafer supply costs," CEO Michael El-Hillow said in a statement today.
In January, Evergreen Solar shut down a panel manufacturing plant in Devens, Mass., which resulted in 800 lost jobs. The state is trying to recuperate part of the $58 million in state aid that was made available to the company, which state officials had touted as a promising clean-energy company worthy of state aid.
Evergreen Solar's wafer manufacturing process uses less silicon, a method for saving money. But the company's technology advantage has not been enough to fight off a crowded field of solar cell and panel manufacturers. In May, it reported a steep decline in sales and megawatts shipped, but only a slight decline in its cost per watt.
"It costs $1.10 per watt in China to make a solar panel. That same exact process costs $1.80 here in the U.S. That's a 60 percent difference, and that's too big," GTM Research analyst Brett Prior told Reuters.
Evergreen Solar said that the intellectual property associated with its String Ribbon wafer process could be sold off as part of the bankruptcy. But because its process is unique, that intellectual property would only be valuable to a company willing to invest in it further to ramp up, Prior told Reuters.
