In a sudden spasm of closure, Solyndra says it has suspended manufacturing operations (including 1100 layoffs effective immediately) and will file Chapter 11 bankruptcy, citing insurmountable problems in solar policies, global credit, and lower-cost competition.
August 31, 2011 – Solyndra says it has suspended manufacturing operations (including 1100 layoffs effective immediately) and will file Chapter 11 bankruptcy in order to evaluate options, including sale or license of its CIGS technology.
The immoveable headwinds causing the company to call it quits? “Global economic and solar industry conditions,” the firm said in a statement, clarifed as “regulatory and policy uncertainties in recent months” that caused “significant near-term excess supply and price erosion,” and an environment in which raising new “incremental capital […] was not possible.”
Before these sudden policy and macroeconomic hurdles, Solyndra claims things were going quite well, with “strong growth” in 1H11 “and traction in North America with a number of large orders for very large commercial rooftops.” Nevertheless the company says it couldn’t ramp up fast enough to compete “with the resources of larger foreign manufacturers.” (Sound familiar, Evergreen?) Compounding the problems were uncertainty in government incentive programs in Europe and declining credit markets.
Solyndra was a poster child for the US DoE’s loan guarantee program, snagging $535M in 2009 (and a pep-rally visit from President Obama himself) to help fund its planned 500MW Fab 2 facility to crank out its cylindrical CIGS systems. In total the company raised more than a billion dollars in funding. But less than a year later (June 2010) the company called off its planned IPO, announced closing one of its facilities and halving its planned output, all while both costs and ASPs stayed sky-high vs. plunging c-Si competitors. Earlier this year it tried to sidle into a new niche market: Agricultural greenhouses. More recently it’s become the poster child for controversy over the DoE’s loan program, with a US House panel calling for an investigation. (Note that the DoE’s backing is a loan *guarantee*, essentially committing to picking up the tab if a company can’t pay its debts… which could very well be the case for Solyndra now.)
For current Solyndra customers, the company pledges its systems “will generate economical, clean, solar power for decades” — but that simply wasn’t enough to overcome the company’s too-high costs and unique product, and other thin-film startups should take this as a harsh lesson on the need to quickly reach scale and volume in order to compete, notes IMS Research’s Sam Wilkinson. “All PV module manufacturing, and CIGS in particular, relies on scale to reach attractive cost levels, and any supplier currently producing in relatively small volumes is at an instant disadvantage compared to the GW-scale manufacturers that are currently dominating the market,” he notes. Consider Uni-Solar, he says, which recently admitted its manufacturing costs more than doubled to $3.40/W — likely double its prices — when it yanked back production of its flexible modules.
On the other hand, solar suppliers, take heart — if bad things do indeed come in threes, perhaps someday we’ll just chalk it up as the US PV sector’s Bloody August with an Evergreen-SpectraWatt-Solyndra triad.