Solyndra, the manufacturer of cylindrical solar photovoltaic panels, which had been granted the Department of Energy’s (DOE’s) first ever loan guarantee funded by the American Recovery and Reinvestment Act, on Tuesday filed for bankruptcy protection. The move follows the California company’s decision last week to shut down its Fremont factory and lay off 1,100 employees and contractors because it could not compete with low-cost manufacturers from other countries.
The company had in March 2009 received DOE conditional approval of a $535 million loan to build a second commercial manufacturing plant. But last week, the company said it would file a petition for relief under Chapter 11 of the Bankruptcy Code while it evaluated its options—including the sale of the business and licensing of its advanced thin-film copper indium gallium diselenide (CIGS) technology and manufacturing expertise.
The plummeting price of solar panels has had implications for many manufacturers in the U.S.: Solyndra is the third U.S.-based solar manufacturer to file for bankruptcy this summer. Evergreen Solar filed for bankruptcy just weeks ago, saying it couldn’t compete in the cost-cutting war with Chinese competitors. Spectrawatt, a company backed by Intel Corp. and Goldman Sachs, days later filed for bankruptcy, citing similar reasons. Other companies are showing signs of struggle: Germany-based SolarWorld and Solon plan to shutter U.S. plants, and QCells and Renewable Energy Corp. said they will cut production in Europe, Cnet.com reported.
Solyndra said it saw “strong growth” in the first half of 2011 and traction in North America with a number of orders for very large commercial rooftops, but it could not achieve full-scale operations quickly enough to compete in the near term with the resources of larger foreign manufacturers.
“This competitive challenge was exacerbated by a global oversupply of solar panels and a severe compression of prices that in part resulted from uncertainty in governmental incentive programs in Europe and the decline in credit markets that finance solar systems,” the company said.
“Regulatory and policy uncertainties in recent months created significant near-term excess supply and price erosion,” said Solyndra’s president and CEO, Brian Harrison. “Raising incremental capital in this environment was not possible. This was an unexpected outcome and is most unfortunate.”
Solyndra’s troubles follow a study commissioned by the U.S. Solar Energy Industries Association (SEIA) and released by energy research firm GTM Research this August. It found that the U.S. had net exports worth $1.9 billion of solar energy products in 2010—the bulk of which (between 13% and 28%) were shipped to China (followed by Germany and Japan). According to the report, the product most exported was polysilicon, a feedstock for crystalline silicon photovoltaics (PV), followed by manufacturing equipment for PV products. China continued to dominate a third of the polysilicon production market, however.
The solar products most imported by the U.S. were $2.4 billion of PV modules in 2010 (almost half which came from China). The U.S. itself manufactured only 611 MW of the 20,840 MW of crystalline silicon PV cells—or about 3% of global market share. China dominates half of this market, followed by Taiwan (16%).
PV has become such a significant part of the U.S. solar business, the report says, that 82% of the $4.4 billion earned from solar energy installations in the U.S. came from PV, compared with just 9% from concentrated solar power (CSP).
One reason is that CSP has been slow to take off. Only one large installation was completed in the U.S., and 88% of the total value of that installation was created domestically. The only components sourced internationally were mirrors, which were imported from Spain.
Last week, SEIA President and CEO Rhone Resch said that Solyndra’s misfortunes were disappointing, but that it was “important to look at an industry’s health more broadly rather than through the narrow lens of one company’s success or failure.”
"What we are seeing in solar happens in every industry that is maturing and growing more competitive. You’re going to see winners emerge who find innovative ways to offer consumers the most competitively priced products,” he said. “The last twelve months have seen one of the most dramatic price drops in the history of the solar market. Already in 2011, the cost of solar PV panels has come down by 30 percent.”
Sources: POWERnews, Solyndra, BloombergCNET.com, Wall Street Journal