Colorado-based thin film solar panel maker Abound Solar, which was the recipient of a $400 million U.S. Energy Department loan guarantee, is shutting down and plans to file for bankruptcy protection next week.
News of the closure, which was first reported by Greentech Media, was later confirmed by the company and in a post by the DOE. Abound's failure shouldn't come as much of a surprise, as unfortunate as it might be.
Abound, which made thin-film solar panels using cadmium telluride, had struggled for months and its closure was a real consequence of the continued slide in crystalline silicon pricing and the increased competition for limited global demand of solar modules, GTM Research analysts MJ Siaho and Shyam Mehta wrote in a emailed statement.
Abound was still in the earlier stages of technology and commercial development and despite more than than $300 million in private investment and $70 million drawn from its $400 million DOE loan guarantee, the company simply didn't have the cost and downstream reach to survive in the tumultuous solar market, the analysts wrote.
Meanwhile, the DOE isn't backing off of its clean-energy-is-the-future stance, despite Abound's failure, which comes on the heels of a string of bankruptcy announcements from other federally-backed startups, most notably Solyndra.
In a lengthy post, the DOE argues that the country will be stronger and more competitive if it continues to support and build a thriving solar industry here.
The question is no longer whether America will be a major customer for the solar industry -- we will. The real question is whether the U.S. will also continue to be a major manufacturer of solar technology, producing many new jobs for American workers, wrote Damien LaVera, the DOE's deputy director of public affairs.
Of the DOE's total loan portfolio, about 35 percent was for solar generating projects, which tend to benefit from falling prices, and less than 4 percent was for solar manufacturers, according to the agency. The solar manufacturing industry has largely struggled due to the steeper than anticipated drop in the price of modules.
Abound Solar has long received support from the government. In 2007, the DOE awarded the company a grant to pilot its manufacturing process. The DOE issued in 2010 a $400 million loan guarantee to help finance the construction of two commercial-scale plants.
Abound only managed to actually borrow $70 million of those funds. The DOE halted in September 2011 disbursements of the loan.
The DOE has already protected more than 80 percent of the original loan amount. Once the bankruptcy liquidation is complete the department expects the total loss to the taxpayers to be between 10 and 15 percent of the original loan amount, LaVera wrote.
The DOE called the failure a disappointment. It stopped far short of changing its position on support for innovative cleantech companies.
While disappointing, this outcome reflects the based fact that investing in innovative companies -- as Congress intended the department to do when it established the program -- carries some risk, LaVera wrote.
Photo: Abound Solar