UPDATED: It’s time to write the obituary for another solar startup: Abound Solar, a thin film startup which secured a $400 million loan guarantee from U.S. Department of Energy to expand production, is shutting down and filing for bankruptcy, the DOE said Thursday.
The Colorado company already appeared to be in serious trouble when it was laying off a few hundred full- and temporary workers earlier this year. At the time, the company said it needed to switch production equipment to produce a new line of better performing solar panels. The plan was to restart mass production by the end of this year, the company said.
The startup, founded in 2007, was also hurting for money but failed to line up an investor to prevent it from going out of business, according to Greentech Media, which first reported Abound’s plan to close.
Update: In a statement, Abound said it plans to file for bankruptcy next week, and it’s ceasing operations and laying off 125 employees.
“Abound believes that, at scale, its USA-made (cadmium-telluride) panel technology has the ability to achieve lower cost per watt than competing crystalline silicon technology made in China. However, aggressive pricing actions from Chinese solar panel companies have made it very difficult for an early stage startup company like Abound to scale in current market conditions,” according to the company statement.
Abound was hoping to become a major player like First Solar when it opened its first factory in 2009 to make solar panels lined with an ultra thin layer of cadmium-telluride to convert sunlight into electricity. At the time, Abound’s CEO, Pascal Noronha, had expected his company to make solar panels cheaply right away, at under $1 per watt like First Solar was doing, never mind that it took First Solar four years of commercial production and multiple factories to reach that level of production cost. Abound didn’t hit that initial goal.
The startup then lined up a $400 million loan guarantee from the U.S. Department of Energy in 2010 to expand its production. The loan guarantee allowed the Abound to borrow money from the Federal Financing Bank. But Abound used up $68 million of the promised loan before the DOE stopped doling out additional money last September because Abound was having trouble meeting certain goals, said a DOE spokesman.
Abound joins a long list of solar panel makers that crumbled in the last year and a half because solar panel supply has just far exceeded demand in the global solar market. Meanwhile, government subsidies for solar power projects, particularly in Europe, the largest solar market, have been shrinking fast. This oversupply problem will likely persist beyond 2012 as more factories are set to open, partly because some companies believe the glut wouldn’t last long or they need to expand manufacturing to reduce costs or else they will never be competitive.
Abound is the second solar manufacturer and DOE loan guarantee recipient who didn’t make it. Solyndra was the first one, and its demise drew a big debate over the wisdom of the loan guarantee program and gave the Republicans ammunition to attack the Obama administration.
The Colorado company has lined up money from investors including Invus Group, Bohemian Companies, BP Alternative Energy and West Hill Investors, DCM (Doll Capital Management) and Technology Partners. Abound had received over $300 million in private funding as of December 2011, the DOE said.