In another blow to the US Department of Energy's embattled loan guarantee program, Colorado-based solar panel manufacturer Abound Solar intends to shutter operations and file for bankruptcy protection next week, the agency said Thursday.
DOE awarded Abound a $400 million loan guarantee in 2010 to build a plant in Colorado and renovate a former auto parts plant in Indiana to produce advanced solar panels, but the agency only disbursed $70 million to the company, according to DOE spokesman Damien LaVera.
"When the floor fell out on the price of solar panels, Abound's product was no longer cost competitive. As a result, the company was unable to meet some of the financial milestones built into the loan agreement to protect the taxpayers and — in September 2011 — the department halted disbursements on the loan," LaVera said in a statement posted on DOE's web site.
DOE expects to recoup all but about $40 million to $60 million of the loan after the company is liquidated.
The announcement comes amid ongoing attacks on DOE from House of Representatives Republicans over a failed $535 million loan guarantee to California-based solar panel manufacturer Solyndra. The company filed for bankruptcy protection in September 2011 and laid off 1,100 workers. Solyndra blamed a drop in the price of traditional solar panels, among other issues, for its demise.
In a statement, the Abound Solar also said it has not been able to compete with cheaper panels made in China.
"Abound believes that, at scale, its USA-made [cadmium-telluride] panel technology has the ability to achieve lower cost per watt than competing crystalline silicon technology made in China," the company said. "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."
The company uses proprietary cadmium-telluride thin film panels that differ from traditional solar panels.
The closure will put about 125 employees in Colorado out of work, the company said.
Abound's struggles are not new. The company in February laid off 180 employees and slowed expansion plans, and its president and CEO was dragged before the House Oversight and Government Reform Committee in May to discuss the company's flagging fortunes.
DOE's LaVera defended the agency's handling of the loan guarantee to Abound, saying that it pulled the plug on new funding in September 2011 after the company failed to meet several financial targets prescribed in the loan agreement.
He also reiterated DOE's defense of the loan guarantee program, saying that funding innovative technologies is inherently risky, and that Congress acknowledged that fact by providing loan-loss reserve funding to cover expected failed loans.
