DOE Loan-Guarantee Recipient Abound Solar Files For Bankruptcy Protection

SI Staff
Written by Laura DiMugno
on June 28, 2012 No Comments
Categories : New & Noteworthy

Abound Solar, a manufacturer of thin-film cadmium telluride (CdTe) solar PV modules, has announced that it intends to file for bankruptcy protection next week.

The company has been in negotiations with potential buyers over the last several months but was unable to reach an agreement with any of the parties.

Like many solar companies that have experienced financial troubles as of late, Abound Solar says ‘aggressive pricing’ in China has made it difficult for the company to compete.

"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," the company noted in a statement announcing the news.

As a result of its decision to suspend operations, 125 employees will lose their jobs. Another 180 workers were let go earlier this year, when the company ceased production of its first-generation solar module.

Comparisons to Solyndra are inevitable, as Abound Solar received a $70 million loan guarantee from the U.S. Department of Energy (DOE) that it used for construction of solar panel manufacturing lines in Colorado. The company says it has not received any DOE funds since August 2011.

According to Damien La Vera, the DOE's deputy director of public affairs, Abound's CdTe panel technology could no longer compete with low-cost crystalline silicon modules.

"When the floor fell out on the price of solar panels, Abound's product was no longer cost competitive," he wrote on the DOE's blog." 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. Of the $400 million that Abound was originally approved for, the department only lent the company less than $70 million."

La Vera preempted claims that taxpayer dollars are being used to support failing companies by noting," Once the bankruptcy liquidation is complete, the department expects the total loss to the taxpayer to be between 10 and 15 percent of the original loan amount."

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