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ABB Pulls Investment from GreenVolts: Will this Trend Continue?

News of ABB pulling its $20 million investment in GreenVolts hit the SPI show floor last week, dampening the electric excitement of President Clinton's keynote address. With so much consolidation, solar company bankruptcies and disappointing political support for solar in the past year, it is difficult to see the future of solar power, and ABB is hitting its brakes before it witnesses another accident.

GreenVolts, a CPV startup that had its hand in everything from technology to installation and once showed much promise, has been forced to lay off more than 60 of its 80 employees. Without ABB’s $20 million investment pledged in December 2011, Greenvolts is forced to look for a buyer for its technology or assets.

This is not an uncommon scenario for the solar industry as of late. Just a few months ago in July, HCPV manufacturer Amonix closed its Las Vegas plant and laid off its staff just one year after opening its doors citing lower-than-expected demand. And since Solyndra shut its doors one year ago and sparked political backlash for the solar industry, consolidation has steadily continued. According to ABB, this trend is expected to continue. 

ABB attributes its decision to retract investment in GreenVolts to the oversupply and plunging prices of panels. But ABB isn’t just solely backing away from this investment, it is avoiding PV technology altogether. 

“It is really in the PV panel space that we are not looking to continue,” said Barry Dillon, ABB’s Director of Media and Community Relations. “We are not interested in continuing to invest in that area or anything that competes with PV panels because of the cost problem.” 

Though ABB invested in GreenVolts just last December, Dillon said the company was surprised at the change in market projections over the past few months. In these few months, projections through 2015 have dropped nearly 40 percent, according to ABB. “On the panels themselves, it just doesn’t look profitable and is not worth our time,” said Dillon. 

So the big question remains: Are other companies going to follow suit? According to Adam Krop, senior analyst at Ardour Capital, companies will continue to pull investments, but mostly in the manufacturing and technology sectors. He believes that the industry is approaching a phase where it needs less investment in research and development because the technology is reaching the point where it doesn’t need support. 

With high overcapacity of panels, there is a huge supply of equipment to meet project development demand for the next couple of years. “We expect installed costs to continue decline for the foreseeable future, which will continue to pressure margins at component manufacturers, but will only support strong installation volume growth,” said Krop. 

Though investment will likely continue to be pulled from the manufacturing and technology front, Krop expects huge investments in the downstream PV market.

“It’s really a business decision,” said Dillon. “The industry analysts are saying that this area is not going to show any profitability for the next two or three years, so why continue?” 

Lead image: Dramatic clouds via Shutterstock

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