Abound Solar is ending the year with glad tidings and good cheer. The thin-film startup said it has raised $110 million in equity and closed a $400 million federal loan guarantee, almost all of which will fund an ambitious plan to build 775 MW of new solar manufacturing capacity in Longmont, Colo.
The U.S. Department of Energy chose Abound out of many applicants for the loan guarantee program, which helps its recipients secure loans by promising the government will repay the loans if the borrowers can't. Abound is only the second solar panel maker to snatch the loan guarantee. The company, founded in 2007, will borrow from the U.S. Treasury's Federal Financing Bank, said Russ Kanjorski, Abound’s VP of marketing.
The Loveland, Colo.-based business plans to spend $500 million overall on the factory expansion plan, Kanjorski said. Abound currently has a 65 MW production line it started in April 2009, and it plans to add another 65 MW by the end of 2011 in the same factory. A third line will be added in 2012 to bring the total annual production capacity at the Longmont factory to 200 megawatts, Kanjorski said.
The expansion plan also includes a new factory in Tipton, Ind. Abound plans to start setting up the factory in 2012 and have a total of 640 MW of annual capacity there by the end of 2014, Kanjorski said. The factory will be located in a leased space that was designed to build auto transmission parts for Chrysler, but it was never used, a casualty of Chrysler's bankruptcy filing in 2008.
The loan guarantee program, called Section 1705 by industry insiders, initially received big applause from renewable energy advocates when Congress set aside $6 billion to fund it as part of the American Recovery and Reinvestment Act last year. Some say the program hasn't been as effective in spurring renewable energy development, from building factories to power plants. Biofuel and electric transmission projects also qualify.
Congress took $3.5 billion away from the budget to fund the Cash for Clunkers program and another bill to save jobs for teachers and other public employees. Some critics say the process of getting loan guarantees is too long and costly, and the loans that come with the guarantees aren't as cheap as they had expected. Then, there were the announcements by the first loan guarantee recipient Solyndra to cancel an initial public offering and shutter its first factory – after it had secured a $535 million loan guarantee to build a second factory – that stirred debates on the success of the government program.
For those companies that have secured the loan guarantees or who are close to doing it, the program makes it possible to borrow huge sums at a time when banks aren't willing to make the loans (so far, loan guarantee recipients have borrowed from the Treasury's Federal Financing Bank).