Abound Solar To File for Bankruptcy, Another Solyndra?

Christopher Martin, Bloomberg
June 28, 2012 | 17 Comments

Abound Solar Inc., a U.S. solar manufacturer that was awarded a $400 million U.S. loan guarantee, will close its doors and file for bankruptcy because its panels were too expensive to compete with Chinese products, according to the U.S. Energy Department.

Abound, based in Loveland, Colorado, borrowed about $70 million against the guarantee, the Energy Department said today in a statement. Calls to Abound executives weren’t returned today.

The failure would follow that of Solyndra LLC, which shut down in August after receiving a $535 million loan guarantee from the same Energy Department program. Abound stopped production in February to focus on reducing costs after a global oversupply and increasing competition from China drove down the price of solar panels by half last year.

“When the floor fell out on the price of solar panels, Abound’s product was no longer cost competitive,” Damien LaVera, an Energy Department spokesman, said in a statement on the agency’s website. [Editor's note: View LaVera's complete article — with excellent solar market analysis — here.]

U.S. taxpayers may lose as much as $30 million on the loan after Abound’s assets are sold and the bankruptcy proceeding closes, he estimated.

“This is not surprising at all,” Anthony Kim, an analyst at Bloomberg New Energy Finance in New York, said today in an interview. “They were trying to sell to a competitive, over- supplied market with limited production. That keeps costs high.”

Unbuilt Factory

Abound was awarded the loan guarantee to build two factories to make thin-film panels using cadmium telluride. It completed one plant, in Longmont, Colorado, and never began construction on the second, which was planned for Tipton, Indiana.

The Energy Department has provided almost $35 billion in loans, loan guarantees and conditional commitments to renewable energy companies. About 35 percent of that is for solar-generating projects, which benefit from falling panel prices, compared with less than 4 percent for solar manufacturers, according to LaVera.

Besides Abound and Solyndra, two other solar manufacturers received loan guarantees. 1366 Technologies Inc. won approval to borrow as much as $150 million to produce polysilicon forsolar panels and SoloPower Inc. was awarded a $197 million guarantee to make rolls of flexible solar panels using a copper-indium- gallium-selenide composite.

Lead image: Bankruptcy filing via Shutterstock.

17 Comments

Amet Kianin
July 1, 2012

Tim< What has happened over period of time is that most countries, USA included have given away their Backbones and have become prisoners in their own industries. The Solution is as I have said many times is that we regain our own industries, promote and get employment for our own citizens, and Cheap is not always the best... My company for cerain for sure fit into the catagory of Cheap, but we are better, more efficient and dont offer a product we offer Solutions.. I agree with you we should protect our own people, so if Chinese company wants to sell locally they should have a local factory employing local labour force, otherwise be subject to taxation / Duties

Tim Gard
June 30, 2012

ametis, I am afraid there is a problem that will not be solved with anyone allowed to run for the Presidential office these days. This puppet regime design has opened our borders in spite of the huge damage it has done to our businesses. Solyndra and companies like it are simply ways to pay back people who have assisted power mongers to have their way with the country, the bankruptcy was just the finishing step. Next up ... Abound Solar. If we do not close our borders to all imports today the country will complete its fall into Hell, and the American experiment will come to a close. No more freedom. Here we are, most Americans can not even tell you what is in the first paragraph of the Constitution much less what it means ... I wonder why we will lose it?

Amet Kianin
June 30, 2012

I dont understand why everyone looks at the Government for the solution, Guys the solution also lies with us the buying public, what ever Happened to Patriotism buying USA made??, why are we settling for buying second best because its Cheaper ?? I have news for you I am far too poor to be able to afford Cheap..

ANONYMOUS
June 29, 2012

As someone who has worked on silicon materials for PV for over 40 years continuously, I find it very disheartening to see the misguided damage that DOE and NREL policies over the past 30 years have done to the prospects and image of PV made in the USA. Instead of focusing the limited resources that were available on the only practical PV material -- crystalline silicon -- expensive, rare, hazardous, or intrinsically inefficient materials systems have been emphasized for funding and hyped to investors, on the blind faith that thin film PV would have to be cheaper. It hasn't worked out that way, and the US has gone from 1st in PV manufacturing to a distant also ran. The image, in the US, of PV as a viable energy source, has been irreparably damaged. It is audacious to whine about other countries making PV at a lower cost than the US is able to achieve, when with prudent focus and government support the US could have been competitive. How are US subsidies for nuclear, oil, and gas energy sources any different from Chinese support for silicon PV?

Gerry Wootton
June 29, 2012

Talk the talk but some day - maybe - walk the walk. US installations 0.14 GW/T$GDP in 2011; German installations 2.1 GW/T$GDP. When compared to energy consumption, it gets worse: 12.4 W/MWh (consumption) new solar in Germany versus 0.5 W/MWh in the US. But then Germany doesn't have any sunshine states. I don't know what economics could be considered more 'artificial' than a FiT yet it appears to be government interference that works, assuming that renewable energy is actually desirable. Everything is a partisan issue - without that, politics of the democratic kind would be somewhat meaningless. Solar power is not immune to party politics in Germany -- why suggest that that is even the problem? Patently, it's not. It's only a question of attitude. If any voter feels that politicians are the problem, they have only one person to blame. If advocacy for renewable energy doesn't play with voters, don't be surprised if governance in this area is underwhelming. Recently, Danish politicians actually boasted that they spent(Americans would say lost)an extra $200M in one year to avoid fossil fuel power generation - amazingly, they could get elected anyway.

Frederick Scheffler
June 29, 2012

This underscores the real problem: UNQUALIFIED GOVERNMENT INVOLVEMENT. Solar power is a solution and source of limitless energy. Regrettably it has become tainted by the political aspects of a bureaucracy having the final word on support or influence. Solar innovation has been stifled. Solutions that could have propelled solar power into a far greater acceptance were ignored in favor of investment into areas that were politically supportive of the current administration. The billions that were poured into California did little to advance the solar program only to reward supporters. SOLAR ENERGY should not be a partisan issue. The Department of Energy was created to eliminate dependence on foreign oil. See how well that has worked. Solar power can be a single family home solution that will change the energy paradigm in this country but it will not happen as long as unqualified and agenda driven bureaucrats and politicians can chart the course. America was the land of innovation. It led the world. We can reclaim that mantle but not depending upon an artificial foundation to propagate solutions.

ANONYMOUS
June 29, 2012

"The question is no longer whether America will be a major customer for the solar industry – we will." That's the government spin on the subject. A healthy market breads a healthy industry. An infant and infantile market such as the US market cannot be expected to drive an industry. Consider that burning garbage to make power is considered a 'green' technology while hydro-electric power is not. Can't have FiTs, even though they work, because the T stands for tariff. SREC scandals seem to be the preferred approach. Meanwhile, the uptake of renewable energy in the US relative to GDP is pitiful. In Germany, the current problem is that the run rate for renewable energy is near zero which distorts the power market i.e. the problem is that conventional market mechanisms don't handle free very well. But ... free is good, isn't it? Seems like the specific 'problem' above could have been solved by merely purchasing 125 MW of solar panels at 1.60 $/W - $200M total investment OR a $75M premium over market - planting them somewhere where they could be doing useful work. A diversion of less than 1% of fossil fuel subsisides or Washington's lunch budget for a year when all is said and done.

Tim Gard
June 29, 2012

How many more injuries are we to suffer in this country before the US government and its political hacks get the message! Close the damned borders to trade! Or are they on the other guys payroll?

ANONYMOUS
June 29, 2012

All the top people at many of these grant funded companies made a lot of money-- lifestyle companies--Solyndra was the most egregious offender: Located manufacturing plant in one of the MOST EXPENSIVE places in the US to do so (founders wanted to live close by), founders were taking $300-$400k a year in salaries EACH!, and lastly look at the travel expenses and places visited by Solyndra people and the supporters of it--makes Congressional junkets of the 70/80s seen tame. These 'managers' were simply marketeers.

June 29, 2012

The possible failure of Abound Solar was as inevitable as Solyndra. Any of you ever wonder why American Industry does not build a TV, or nearly any type of electronics. This nation is sliding down hill and quite quickly. While we take 4 day week-ends the Chinese are seeking to put the American worker where they believe he should be...in obsolescence. Don't blame the Chinese, we pulled the trigger.

ANONYMOUS
June 29, 2012

For a frame of reference, I think it's important to note that LDK solar of China is on the verge of bankruptcy also. Their loans from the Chinese government amounts to at least $1.4 BILLION. Many of the other Chinese PV players have received similar sized loans (which is a big reason for the massive oversupply). I guarantee you that many of the folks in these companies, banks, investment firms etc. have mba's from Harvard and the like. Yet they still made the investment. Hindsight is 20/20 but once you've rolled the dice, there is no taking it back. When the blood-letting is done, there will be a stable and healthy group of survivors.

Amet Kianin
June 29, 2012

Another company claims that they cannot compete with Chinese crap, America The land of Technology and Innovation and Cant compete with China ??, me thinks these guys were just riding the Gravy Train, and once they ate the Gravy, Bye bye ....

JOEL GORDES
June 29, 2012

Hi Nick, Getting back to you, love me or hate me, my real name is Joel Gordes. Yes, I certainly did generalize as the larger political debate on the failure of some solar ("green") companies is also a more generalized criticism of government subsidization. To be sure, your points on the specifics carry merit but your earlier, brief comment seemed to be in that more generalist vein. Best, Joel Gordes

Ed Mahoney
June 29, 2012

Years ago (pre-obama) many warned that relying on grants, guaranteed loans, etc. from the government would be a death threat for the solar (PV) industry. Unfortunately, it has come true. To be a REAL market the U.S. solar industry must develop, market & sell its benefits to the end user. Instead, with billions to blow it has overgrown and is in an oversupply predicament. The PV industry has noone to blame but themselves and their greed. Also,more recently, Obama's favorite toy, RENEWABLES, has added to the further demise of the market. It's time for this industry to grow up (I've been involved in PV since 1973, nearly 40 years) and realize that if being a factor in the energy generating market one must be competitive with other forms of energy generation.

June 29, 2012

Christopher, I am compelled to ask you a question of you. Are you familiar with the difference a solar panel and a solar module. This I could expect from "Solar Fred," but you as a reporter should know the difference. Of course, it is possible that Abound Solar actually produces solar hot water panels and in such a case, you would remain correct. Some may ask...Why is the use of a term important? If I were to call a solar module, a solar panel, I doubt that my customers would feel much confidence in me. I got to go, off in my SUV...I mean, my Prius, oh well. What do you think?

Edward Lovelace
June 29, 2012

This is a story that doesn't get out enough. Solyndra was a tiny part of the loan program but it sucks all the air out of the news room and political soap box. This story also makes the key point that what hurt the 4% manufacturing loans actually helped the remaining 35% solar project loans. Now, that highlights a policy question that has to be answered: is this really the outcome we would like (short term construction jobs vs. loan term manufacturing jobs). Maybe it is for short term stimulus needs, but policy has also got to address the economic growth sustainability. Thx Ed

JOEL GORDES
June 29, 2012

It has recently become more fashionable to say that government should not be in the business of picking winners (or losers) in the market. Not only is that dangerous to our economic well-being but also to our national security. While there have been some notable government-funded failures, there have also been some resounding successes that belie the myth that bad choices are the more common outcome. By way of example, each of the developments below benefited from government largesse of one form or another: Mass production methods by Eli Whitney Early land grants to the railroads Samuel F.B. Morse's first telegraph line Gas turbines (jet engines and generators) Computers/internet Utility monopolies with obligations to serve All of those have made our life better in some way. Often it has been research and development funding by government that allowed for their early commercialization. Sometimes that was followed by massive government procurement, another form of subsidy, leading to drastic reductions in the cost of technology making it available to all. Many of these industries or their descendants are subsidized in one form or another to this day. It was the granting of utility monopolies around the turn of the last century that allowed companies, who would then have captive ratepayers, to build larger plants having economies of scale that provided them much higher efficiencies. This resulted in significantly lower cost of electricity and allowed many more people to enjoy its advantages. The technology of the time demanded this straying from free markets or this rapid and massive deployment could not have happened otherwise. And so it continues today and while some will be losers, we need to cultivate winners. They key is setting the right metrics for the selection process.