Abound Solar, a Loveland, CO solar manufacturing plant announced Thursday it was closing down and filing for bankruptcy. In February, the company cut its workforce and said it was switching to another technology and it would continue operating. Thursday, it gave up the fight. About 125 workers will be out of a job.
While Abounds’s fight is over, this just adds fuel to the fight by Republicans in Congress to end government support for renewable energy. Abound received about $68 million in federal loan guarantees. Estimates are the taxpayer could be on the hook for somewhere between $40 and $60 million according to Denver’s KUSA TV.
This announcement was buried behind the Supreme Court ruling on the Affordable Health Care Act and the vote in the House holding the Attorney General in contempt of Congress. However, as the dust settles, the usual suspects in Congress will be calling for an investigation and new charges against the Obama Administration over this.
Energy Secretary Chu predicted in an interview earlier this month that there would be a few more failures in the loan program. He put it into perspective saying the failure rate is less than 3%. Overall the Secretary pointed out, the program has been a success and has been transformational in the development of renewal energy.
Abound said its bankruptcy was caused by the price drop in solar panels. They blame the Chinese for dumping government subsidized panels o the market. The Obama administration has place a tariff on Chinese solar panels and is considering additional tariffs.
According to the company’s press release, Abound “…has been working to scale up manufacturing for its high-efficiency, second generation PV module, which was tested and verified by the National Renewable Energy Laboratory (NREL) to deliver 85 watts per panel and 12.5 percent efficiency. Abound has been in discussions with potential buyers over the last several months, but ended negotiations when the involved parties were unable to come to an agreement on terms.”
The release stated further “Abound believes that, at scale, its USA-made CdTe panel technology has the ability to achieve lower cost per watt than competing crystalline silicon technology made in China. However, aggressive pricing actions from Chinese solar panel companies have made it very difficult for an early stage startup company like Abound to scale in current market conditions.
According to the U.S. Commerce Department, the U.S. solar market has seen the prices for panels drop by more than 50 percent in the past year at a time when the value of imports of Chinese-made solar cells nearly quadrupled from $639 million in 2009 to $3.1 billion in 2011.”
Analysts agreed that a global oversupply of manufacturing capacity was hurting solar panel manufactures. “The less cost-competitive vendors are exiting the market,” said Amir Rozwadowski, an analyst at Barclays. “In the near term it’s going to be painful for vendors that aren’t cost-competitive.”
This is part of the shake out in the developing solar industry. Some technologies will work, others won’t. Some companies will fail, others won’t. That is business and it is reality. Taxpayers have heavily subsidized oil companies for 100 years and still are. They claim they still need the subsidies despite record profits. Their argument is that when they drill a hole, they have no idea if it will be dry. Taxpayers subsidize those dry holes.
That same principle needs to apply to renewable energy. We need to accept that failure is a part of business.
So, tighten your seatbelt for Representative Issa and other committee chairmen to make political hay out of this for the election at the expense of the lives of the families that now have lost their income, and the private investors that lost the $300 million they invested, or the local businesses who will also suffer as a result of this closing.
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