New Hampshire, USA -- Fremont-Calif.-based Solyndra, which in 2009 received a $535 million federal loan guarantee, announced Wednesday that it would file for Chapter 11 bankruptcy protection and immediately lay off 1,100 full-time and temporary employees.
The announcement promises to heighten scrutiny of the Department of Energy loan program, which has already been the target of an investigation led by House Republicans. Industry analysts also see the potential for political fallout and the possibility that those pushing for budget cuts will hold the Solyndra bankruptcy up as an example of wasteful spending.
Rhone Resch, president and CEO of SEIA, cautioned against taking a narrow perspective of the Solyndra bankruptcy.
“The success of the solar industry cannot be viewed through the lens of one company,” said Resch in a written comment. “Like all industries, some companies will fare differently than others. While the closure of Solyndra’s operations is disappointing, the solar industry as a whole is a bright spot in the U.S. economy.”
Solyndra’s Demise
The company had downsized its planned growth starting in 2010 when the CIGS thin-film manufacturer pulled an IPO, restructured its executive team, and announced plans close one of its California plants and delay expansion of its newest facility.
According to its website, Solyndra was in the process of ramping up to 300 MW at its California facility. In 2010, the company completed more than 1,000 installations across the world. It may now look to sell its business and licensing of its advanced CIGS technology.
The company received much fanfare for its innovative rooftop technology and big ambitions. It was held up as an example of a company thriving behind American technology and manufacturing during visits by then-Gov. Arnold Schwarzenegger, Energy Secretary Steven Chu and President Obama.
According to a company press release, Solyndra saw strong growth in the first half of 2011 and secured a number of orders for very large commercial rooftops in North America. Officials said the company could not “achieve full-scale operations rapidly enough to compete in the near term with the resources of larger foreign manufacturers.” The company went on to say a global oversupply of solar panels, falling prices and uncertainty in traditional markets such as Europe led to its decision to exit the solar business.
The news out of California ends what has proven to be a tough month for solar manufacturers in America. U.S.-based Evergreen Solar, also a recipient of strong government backing, filed for bankruptcy and shut down U.S. manufacturing while Germany-based Solon decided to close its American manufacturing operations in favor of focusing on its role as a developer. In both instances, competition from China was cited as a factor in the moves.
DOE Program
According to Robert Lahey, senior legislative analyst at Ardour Capital, the DOE loan program has had troubles from the start. The half-a-billion dollar investment in Solyndra’s manufacturing facility was the first big bet made by the federal program, and ultimately, it was a bad one.
He said over the past year new leadership has shifted the focus more toward solar developments, such as the $4.5 billion guarantee made to First Solar this summer. “The Department of Energy doesn’t look good right now,” said Lahey. “To be fair to the program, if you were to wait another six months and look at some of these others projects (like First Solar), it’d look better.”
Resch on Wednesday reaffirmed his support for the program. “The DOE Loan Guarantee Program is a success, attracting necessary private capital for solar projects and manufacturing plants,” he said.
The program is scheduled to sunset at the end of this year, and according to Lahey, the opportunity for it to be defunded has passed. Cuts to the program were avoided earlier this year and again during the debt ceiling negotiations. But it could come up again due to the bipartisan congressional panel tasked with hacking into the budget deficit. However, come November when that committee is expected to lay out its plan, it’s unlikely the loan program will be cut retroactively.
With calls for debt reduction growing louder by the month, the program’s future is uncertain. Still, many on Capitol Hill feel perhaps a revised version of the program should have a future. “But their task just got a lot harder,” said Lahey, “because of Solyndra and Evergreen and because of the impact of the debt debate.”
House Investigation
According to a letter sent earlier this year to the Office of Management and Budget, Republican leaders of the House Energy and Commerce Committee expressed concern over actions by the company following the federal loan to Solyndra. “Since the loan guarantee was closed in September 2009, Solyndra has suffered a number of financial setbacks, including the cancellation of a planned public offering in June 2010 and problems with cash flow.”
They also cited “red flags” raised by some of the president’s top advisors over OMB’s review process.
As part of an interagency review process, OMB is responsible for reviewing and approving the Credit Subsidy Costs of the DOE loan guarantees. The implementation of the DOE loan guarantee program, and OMB’s role in it, were the subjects of an October 25, 2010, Briefing Memorandum addressed to President Obama from Carol Browner, then-Director of the White House Office of Energy and Climate Change Policy; Ron Klain, then-Chief of Staff to Vice President Biden; and Lawrence Summers, then-Director of the National Economic Council. That memorandum notes that the loan guarantee program had been subjected to criticism for its ‘slow implementation’ and ‘making commitments to projects that would have happened anyway and thus fail to advance [the President’s] clean energy agenda.’
The letter followed another letter sent to Energy Secretary Steven Chu questioning why the agency selected Solyndra as a loan recipient. The letter also requested documents detailing the decision-making process associated with the loan.
Impact on Manufacturing
According to SEIA, the U.S. solar industry employs more than 100,000 workers at more than 5,500 companies. The trade organization also pointed to a recent report that found the U.S. was a net exporter of $1.9 billion worth of solar energy products in 2010.
“In the last 18 months, solar companies have either added or expanded almost 60 factories in the U.S. and driven the installed cost of solar down by 30 percent,” said Resch.
Many in the industry, though, have concerns about the country’s viability as a solar manufacturing base and its ability to compete with growing Asian dominance. Currently, about 60 percent of today’s modules are made in China. Though many Chinese companies are moving into the U.S. space, it’s often as an assembler of modules rather than as a manufacturer of cells. The trade-offs for those companies are higher labor costs, lower shipping costs, and eventually, a “Made in the U.S.A. sticker.”
“We have to get more technologies developed here in the U.S.,” said Adam Krop, senior solar analyst at Ardour Capital. “I don’t think much of the heavy-lifting on the manufacturing side will be done here. I don’t see a change in the near future. I think it will come down to developing new technologies and farming out those ideas and those platforms, and maybe creating partnerships with Asian-based entities [that can do the manufacturing].”
Though more than 1,000 jobs were lost due to Wednesday’s announcement, Krop says a strong solar presence can lead to stable gains in employment. They’ll be in construction, however, and not likely in manufacturing. Predictable subsidies, said Krop, will lead to more development, which will then create a strong construction base.
Before we get to that point, said Krop, we’ll have to get through industry shake-ups, such as the Solyndra bankruptcy.
“It’s going to be such a high-profile event,” said Krop. “You will have naysayers point to it, saying it’s too expensive of a technology. In the end, it’s about getting solar on your rooftops and into your communities in a cost-effective manner.”
Westinghouse Solar's Barry Cinnamon has further commentary on the announcement here, and Arno Harris of Recurrent Energy commented here.
http://www.renewableenergyworld.com/rea/news/article/2011/08/solyndra-to-file-for-bankrupt cy- 110 0-lose-jobs
The announcement promises to heighten scrutiny of the Department of Energy loan program, which has already been the target of an investigation led by House Republicans. Industry analysts also see the potential for political fallout and the possibility that those pushing for budget cuts will hold the Solyndra bankruptcy up as an example of wasteful spending.
Rhone Resch, president and CEO of SEIA, cautioned against taking a narrow perspective of the Solyndra bankruptcy.
“The success of the solar industry cannot be viewed through the lens of one company,” said Resch in a written comment. “Like all industries, some companies will fare differently than others. While the closure of Solyndra’s operations is disappointing, the solar industry as a whole is a bright spot in the U.S. economy.”
Solyndra’s Demise
The company had downsized its planned growth starting in 2010 when the CIGS thin-film manufacturer pulled an IPO, restructured its executive team, and announced plans close one of its California plants and delay expansion of its newest facility.
According to its website, Solyndra was in the process of ramping up to 300 MW at its California facility. In 2010, the company completed more than 1,000 installations across the world. It may now look to sell its business and licensing of its advanced CIGS technology.
The company received much fanfare for its innovative rooftop technology and big ambitions. It was held up as an example of a company thriving behind American technology and manufacturing during visits by then-Gov. Arnold Schwarzenegger, Energy Secretary Steven Chu and President Obama.
According to a company press release, Solyndra saw strong growth in the first half of 2011 and secured a number of orders for very large commercial rooftops in North America. Officials said the company could not “achieve full-scale operations rapidly enough to compete in the near term with the resources of larger foreign manufacturers.” The company went on to say a global oversupply of solar panels, falling prices and uncertainty in traditional markets such as Europe led to its decision to exit the solar business.
The news out of California ends what has proven to be a tough month for solar manufacturers in America. U.S.-based Evergreen Solar, also a recipient of strong government backing, filed for bankruptcy and shut down U.S. manufacturing while Germany-based Solon decided to close its American manufacturing operations in favor of focusing on its role as a developer. In both instances, competition from China was cited as a factor in the moves.
DOE Program
According to Robert Lahey, senior legislative analyst at Ardour Capital, the DOE loan program has had troubles from the start. The half-a-billion dollar investment in Solyndra’s manufacturing facility was the first big bet made by the federal program, and ultimately, it was a bad one.
He said over the past year new leadership has shifted the focus more toward solar developments, such as the $4.5 billion guarantee made to First Solar this summer. “The Department of Energy doesn’t look good right now,” said Lahey. “To be fair to the program, if you were to wait another six months and look at some of these others projects (like First Solar), it’d look better.”
Resch on Wednesday reaffirmed his support for the program. “The DOE Loan Guarantee Program is a success, attracting necessary private capital for solar projects and manufacturing plants,” he said.
The program is scheduled to sunset at the end of this year, and according to Lahey, the opportunity for it to be defunded has passed. Cuts to the program were avoided earlier this year and again during the debt ceiling negotiations. But it could come up again due to the bipartisan congressional panel tasked with hacking into the budget deficit. However, come November when that committee is expected to lay out its plan, it’s unlikely the loan program will be cut retroactively.
With calls for debt reduction growing louder by the month, the program’s future is uncertain. Still, many on Capitol Hill feel perhaps a revised version of the program should have a future. “But their task just got a lot harder,” said Lahey, “because of Solyndra and Evergreen and because of the impact of the debt debate.”
House Investigation
According to a letter sent earlier this year to the Office of Management and Budget, Republican leaders of the House Energy and Commerce Committee expressed concern over actions by the company following the federal loan to Solyndra. “Since the loan guarantee was closed in September 2009, Solyndra has suffered a number of financial setbacks, including the cancellation of a planned public offering in June 2010 and problems with cash flow.”
They also cited “red flags” raised by some of the president’s top advisors over OMB’s review process.
As part of an interagency review process, OMB is responsible for reviewing and approving the Credit Subsidy Costs of the DOE loan guarantees. The implementation of the DOE loan guarantee program, and OMB’s role in it, were the subjects of an October 25, 2010, Briefing Memorandum addressed to President Obama from Carol Browner, then-Director of the White House Office of Energy and Climate Change Policy; Ron Klain, then-Chief of Staff to Vice President Biden; and Lawrence Summers, then-Director of the National Economic Council. That memorandum notes that the loan guarantee program had been subjected to criticism for its ‘slow implementation’ and ‘making commitments to projects that would have happened anyway and thus fail to advance [the President’s] clean energy agenda.’
The letter followed another letter sent to Energy Secretary Steven Chu questioning why the agency selected Solyndra as a loan recipient. The letter also requested documents detailing the decision-making process associated with the loan.
Impact on Manufacturing
According to SEIA, the U.S. solar industry employs more than 100,000 workers at more than 5,500 companies. The trade organization also pointed to a recent report that found the U.S. was a net exporter of $1.9 billion worth of solar energy products in 2010.
“In the last 18 months, solar companies have either added or expanded almost 60 factories in the U.S. and driven the installed cost of solar down by 30 percent,” said Resch.
Many in the industry, though, have concerns about the country’s viability as a solar manufacturing base and its ability to compete with growing Asian dominance. Currently, about 60 percent of today’s modules are made in China. Though many Chinese companies are moving into the U.S. space, it’s often as an assembler of modules rather than as a manufacturer of cells. The trade-offs for those companies are higher labor costs, lower shipping costs, and eventually, a “Made in the U.S.A. sticker.”
“We have to get more technologies developed here in the U.S.,” said Adam Krop, senior solar analyst at Ardour Capital. “I don’t think much of the heavy-lifting on the manufacturing side will be done here. I don’t see a change in the near future. I think it will come down to developing new technologies and farming out those ideas and those platforms, and maybe creating partnerships with Asian-based entities [that can do the manufacturing].”
Though more than 1,000 jobs were lost due to Wednesday’s announcement, Krop says a strong solar presence can lead to stable gains in employment. They’ll be in construction, however, and not likely in manufacturing. Predictable subsidies, said Krop, will lead to more development, which will then create a strong construction base.
Before we get to that point, said Krop, we’ll have to get through industry shake-ups, such as the Solyndra bankruptcy.
“It’s going to be such a high-profile event,” said Krop. “You will have naysayers point to it, saying it’s too expensive of a technology. In the end, it’s about getting solar on your rooftops and into your communities in a cost-effective manner.”
Westinghouse Solar's Barry Cinnamon has further commentary on the announcement here, and Arno Harris of Recurrent Energy commented here.
http://www.renewableenergyworld.com/rea/news/article/2011/08/solyndra-to-file-for-bankrupt cy- 110 0-lose-jobs
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