Solar panel firm Solyndra to cease operations
The California solar panel manufacturer that received a high-profile $535-million Energy Department loan guarantee said it was ceasing operations, laying of 1,100 workers and preparing to file for bankruptcy protection.
Solyndra of Fremont, Calif., said it had been rocked by stifling global economic conditions and faced heavy competition from Chinese firms that were undercutting it on costs.
It was quite a fall from late 2009, when Solyndra received a $535-million federal loan guarantee as part of the $787-billion economic stimulus package. In May 2010, company executives hosted President Obama on a factory tour and said they expected to add employees.
But in July of this year, management was grilled on Capitol Hill by House Republicans, who said that there were indications that the company was in weak financial condition and wasn’t a good choice for the loan program.
Solyndra would become the third such company to file for bankruptcy in recent days. Spectrawatt Inc. of Hopewell Junction, N.Y., filed for Chapter 11 bankruptcy protection Aug. 19. Evergreen Solar Inc. of Marlboro, Mass., filed for Chapter 11 on Aug. 15.
Experts said that solar energy was still among the most promising of all of the alternative energy sources, but they added that due diligence was necessary to pick the best companies. Some said a consolidation of the industry was inevitable.
“There used to be 50 car companies in this country, but very few survived,” said Bill Bathe, chief executive of U.S. Energy Services, a Minneapolis energy management company. “For consumers, this is an exciting time, but for investors, this is still a very high-risk stage. You may hit a home run or be part of the experiment that delivers no payout.”
Tyson Slocum, director of the energy program at Public Citizen, said there were lessons to be learned in the way other nations have funded their renewable energy projects.
“You can’t end loan subsidies for renewable energy. That would be a disaster,” Slocum said. “In countries like Germany and Japan, which have a much larger footprint in this area, subsidies have been remarkably successful.”