Bankruptcy of solar firm: ominous sign for industry
Bankruptcy of Solyndra, once touted by President Obama, is third failure of a US solar firm this month. Bankruptcy will serve as fuel for critics of government stimulus.
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In a blog posting, Energy Department spokesman Dan Leistikow said Solyndra was a once promising company that had increased sales revenue by 2,000 percent in the past three years. The $535 million loan guarantee was sought by both the Bush and Obama administrations, he said, and private investors also put more than $1 billion into Solyndra.Skip to next paragraph
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"We have always recognized that not every one of the innovative companies supported by our loans and loan guarantees would succeed, but we can't stop investing in game-changing technologies that are key to America's leadership in the global economy," Leistikow said.
Solyndra was heralded as one of the nation's bright spots of green technology innovation, creating a solar tube of sorts that could soak up sunlight from many different angles, producing energy more efficiently and using less space. The company's panels were also light and easy to install, which was meant to save up front costs.
But over the past few years, other companies caught up and provided similar products at a lower cost.
Brian Harrison, Solynda's president and CEO, said that raising capital became impossible.
"This was an unexpected outcome and is most unfortunate," Harrison said in a statement.
Another solar company, Spectrawatt Inc. of Hopewell Junction, N.Y., filed for Chapter 11 bankruptcy on Aug. 19. Its CEO said in the filing that it could not compete with solar manufacturers in China, which receive "considerable government and financial support."
Solar industry advocates said the failure of these three companies is not indicative of the health of the U.S. solar industry as a whole and that overall the Energy Department's loan guarantee program has been a success.
"In the last 18 months, solar companies have either added or expanded almost 60 factories in the U.S. and driven the installed cost of solar down by 30 percent," said Rhone Resch, president and CEO of the Solar Energy Industries Association.
"To date, solar projects that have received loan guarantees will help to deploy enough clean solar energy to power nearly 1 million homes and create tens of thousands of jobs across 28 states," he said.
Jesse Pichel, a clean energy analyst with New York-based investment firm Jefferies & Co. said Solyndra's products used unique technology that was more expensive to install, "and the improvement was marginal at best."