The federal lawsuit, filed Thursday in San Francisco, accuses major Chinese solar panel makers Suntech Power, Trina Solar, Yingli Green Energy, as well as their suppliers and banks, of colluding to undercut competitors by flooding the U.S. market with products at below cost, Bloomberg reports. Solar panel prices fell 75 percent over four years as a result and forced Solyndra to file for bankruptcy over a year ago, Solyndra says.

Solyndra is seeking $1.5 billion in compensation for the loss of its business value.

The lawsuit seems an odd move for the California company, though winning the lawsuit could help it pay off its list of creditors. The lawsuit also will shine a new spotlight on the trade practices of Chinese solar cell and panel makers, who have risen to dominate the world’s solar market. A day before Solyndra filed the lawsuit, the U.S. Department of Commerce issued a final decision on tariffs against Chinese silicon solar cell makers after determining that the companies had received unfair subsidies from the Chinese government and were selling their products at below fair market values.

Chinese manufacturers are facing similar trade complaints in Europe. The Chinese government is understandably unhappy with the commerce department’s decision and may slap tariffs on silicon – a raw material in solar cells – from the U.S.

Since its bankruptcy filing, Solyndra hasn’t been able to find a buyer for its technology. The gleaming factory is in the process of being sold to Seagate Technology, a maker of data storage devices.

Solyndra’s rise and fall touched off a political storm about whether the government placed too big of a bet on cleantech companies lie Solyndra, which received $535 million loan guarantee to build a factory. The company was counting on the new factory to mass produce its solar panels, which were consisted of solar cell-filled tubes, and drive down its costs and therefore prices for those panels. The company, which also had raised over $1 billion in private money, couldn’t reduce its costs fast enough, however, before it ran out of money and went bankrupt.

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Hanergy plans to buy MiaSole for a measly $30 million, according to the letter, and also reported by the San Francisco Chronicle. While the Silicon Valley solar company has been mum about how much venture capital it’s raised since its inception in 2001, published reports have put the figure somewhere between $400 million and $500 million by the end of 2011. Earlier this year, the company raised $55 million.

MiaSole was desperate for a white knight to rescue it from oblivion. After years of research and development, the company seemed to have finally nailed its manufacturing process to making solar panels out of copper, indium gallium and selenium (CIGS) that are more efficient than many rivaling CIGS thin film companies. But it was running out of money and needed to expand its production and attract customers. CEO John Carrington joined MiaSole late last year, and he made a public appeal in December for investors and partners who could bring money and sales and marketing expertise.

Hanergy may not be a well-known company in the U.S., but it’s large renewable energy producer in China. We pointed out in this post back in June that Hanergy is a company worth watching not only because of its large hydropower and solar panel production plants in China, but also because of its involvement in installing solar energy equipment. Hanergy won a 3-year deal to install solar panels on Ikea’s stores in China. The company also has built a wind energy generation business within China.

With the purchase of MiaSole, Hanergy is knitting together a global solar thin film empire. Last week, the company completed the purchase of CIGS thin film maker Solibro from Q-Cells in Germany. Hanergy said it would increase Solibro’s production for the European market. With MiaSole’s purchase, Hanergy, of course, will have a CIGS thin film manufacturing base in the U.S.

Solar startups have been picked off one by one cheaply – or filed for bankruptcy – over the past 19 months because the global solar market has been plagued by a glut of solar panels. The fast-falling panel prices – roughly 50 percent in 2011 alone and 30 percent so far this year – have put an enormous pressure on companies to lower their prices. That pressure is particularly difficult to handle for startups, which often have higher manufacturing costs initially when they are scaling up production of their technology. And many of them indeed were trying to raise more money and make that leap to mass production when the financial market crisis hit in late 2008, followed by the oversupply of solar panels starting in 2011.

One of the remaining CIGS thin film companies from Silicon Valley, SoloPower, hopes to reverse the trend. The company inaugurated its first large factory in Portland, Ore., last week and plans to start making use of a $197 million federal loan guarantee to expand production.

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It was only last month when a company spokeswoman told me by email that GE was still building its factory and hoping to start production in 2013. But the company reconsidered that plan in recent weeks after seeing solar prices tumbled significantly for over a year, and it stopped the factory building activities last week, Merfeld said.

The company also has down-sized the number of people working on its solar team, but Merfeld declined to disclose the number of layoffs. Since the goal now is to focus on technology improvement, those who were hired to work on, say, factory operations were let go.

“We are banking on the fact that with the technology improvement and our investment in technology today, we will put out more competitive products coming out of that factory,” Merfeld said.

The time line for re-starting the factory isn’t firm right now, but GE is looking at doing that in 2014. That doesn’t mean the factory will be mass producing solar panels then, though. The factory space, located in Aurora, still needs some infrastructure work before solar panel production equipment could be installed. After the equipment is in, it would usually take a year or longer to test the machines and bring them online for mass production.

GE was building the factory to make solar panels based on the technology from a startup called PrimeStar Solar, which GE bought last year. The technology would enable GE to produce solar panels with an ultra-thin layer of cadmium-telluride to convert sunlight into electricity. First Solar is the best known cadmium-telluride solar panel maker, and its growth to become one of the world’s largest solar panel makers has inspired many startups to develop the same type of technology and try to become an alternative source of supply.

But solar manufacturing has been a hellish business to be over the past year and a half, as a glut of solar panels caused the wholesale prices to drop near 50 percent alone during 2011. The oversupply problem isn’t going away any time soon, too, according to GTM Research, which is forecasting 59 GW of solar panel production for a global market that can only take 30 GW this year. That supply-and-demand imbalance is set to continue beyond 2012.

A long list of manufacturers have filed for bankruptcy in the U.S. and abroad. One of the most recent casualties is Colorado-based Abound Solar, which received a $400 million federal loan guarantee to expand manufacturing but by last fall it could no longer meet certain goals to continue to make use of the loan guarantee. It tried to line up more investors and customers but couldn’t do it, and last week it finally conceded that it couldn’t stay business any longer.

The new path GE has charted sounded similar to what Abound said it would do back in February this year, when it first revealed that it was laying off hundreds of people and refocusing its effort on improving its technology in order to come up with better performing and cost competitive products.

GE wants to improve how efficient its cadmium-telluride solar panels can convert sunlight into electricity because that is one way to reduce production costs. Last year, a GE executive said he expected the new factory would start shipping solar panels with 14 percent efficiency. Now the goal is to achieve more than 15 percent, Merfeld said.

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Chromatin’s plans

Chicago-based Chromatin said it has lined up $10 million – the first close of the D round – from investors including the venture arm of oil giant BP and the investing arm of product firm Unilever. Chromatin has developed a technology to genetically modify energy crops so that they grow fast and abundant, and its plant of choice if sorghum, a grass with some desirable, natural characteristics as a bioenergy feedstock, such as a high tolerance for drought and heat.

Chromatin wants to make money by selling its hybrid sorghum seeds to growers and license its technology to agricultural companies. The plants could be used to produce transportation fuel, electricity or chemicals for other products.

The company’s reach for commercial production may arrive sooner now that more cellulosic biofuel producers are finally getting on with building their first refineries. Generous government grants and loans have helped biofuel companies complete their technology development plans and build pilot and commercial plants. The U.S. Department of Energy last month finalized a $105 million loan guarantee to Poet to build a biofuel refinery in Iowa using corn cobs, husks and leaves, and a $132.4 million loan guarantee to Abengoa Bioenergy to build a plant in Kansas that will cover agricultural wastes such as corn stalks and leaves to fuel.

Mastering the processes of converting biomass to fuel is only one of the steps in boosting the country’s cellulosic biofuel production, however. Producing enough feedstocks is also important and could be a bottleneck for reaching the renewable fuel goals set by the U.S. government. Fuel giant Chevron certainly sees a shortage of feedstocks.

“There is a number of promising conversion technologies, but the limiting step is a lack of large-scale biomass feedstock,” said Des King, president of Chevron Technology Ventures, in an interview last month. King said 100,000 square miles of forests will be needed to produce 1 million barrels of cellulosic biofuel per day. Chevron formed a cellulosic biofuel joint venture called Catchlight Energy with Weyerhaeuser in 2008 to take advantage of Weyerhaeuser’s timberland holdings.

Genomics guru Craig Venter and his startup Synthetic Genomics also announced this week that they’re creating a joint venture around using genomics to create crops with a higher yield, lower cost, and better crop protection in an effort to use the crops potentially for biofuels.

However, transportation fuel may not be the first sources of profit for Chromatin’s technology. The company just signed a preliminary agreement with electricity producer Constellation Energy to test Chromatin’s sorghum to produce power at two plants in California. One plant current uses coal, while the other uses agricultural and wood wastes.

Zeachem’s goals

Meanwhile, ZeaChem said it has raised a $19 million Series C round as it marches toward commercializing its process of turning plants into fuel. Like many other biofuel companies, ZeaChem also is exploring the use of its technology for chemicals that can be used in products other than transportation fuel.

The Colorado company plans to bring a demonstration refinery plant online in Oregon by the end of the year, with an annual capacity of 250,000 gallons. ZeaChem recently received a $40 million grant from the U.S. Department of Agriculture to use the demonstration plant to produce blending fuels for cars and jets that run on diesel and other types of petroleum-based fuels. The company expects to produce the first batches of jet and diesel fuels in 2013 and gasoline replacement in 2015.

Birchmere Ventures led the $19 million round, which also came from investors such as Firelake Capital, Globespan Capital Partners and Mohr Davidow Ventures.

Image courtesy of Chromatin, and GigaOM

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Santa Monica-based SolarReserve is building its first plant — the 110 MW Crescent Dunes Solar Energy Project — in Nevada, and it received a $737 million loan guarantee from the U.D. Department of Energy in September. The company’s technology, licensed from United Technologies’ Rocketdyne, uses flat mirrors to concentrate sun light onto a tank on top of a tower, which in turn generates steam and pipes it to a turbine generator to produce electricity.

The tank contains molten salt, which allows SolarReserve to bank energy for later use. The energy storage makes it possible for a solar farm to generate electricity and feed to the grid only when its utility customer wants it. NV Energy, which has signed a contract to buy Crescent Dunes’ power, has agreed to pay $0.13 per kilowatt-hour for electricity from the solar farm. Crescent Dunes will come with 10 hours of storage.

SolarReserve, founded in 2007, is part of a group of companies looking to build solar plants out of concentrating solar thermal power technology, and these developers are planning or building their very first projects in the U.S., largely clustered in Southwestern states such as California, Arizona and Nevada. The $737 million loan guarantee only meant to cover as much as 80 percent of Crescent Dunes’ cost; SolarReserve has also lined up ACS Cobra, a power plant engineering firm, and financial service firm Santander as investors in Crescent Dunes. SolarReserve expects the project to be completed and operational in 2013.

This latest $27 million round will support SolarReserve’s corporate expenses, and it will need the money not just to carry out Crescent Dunes but also to work on other  projects, such as the Rice Solar Energy, in California. That 150 MW project already has gotten approval for construction from the California Energy Commission, and SolarReserve has a contract to sell the power from Rice Solar Energy to utility Pacific Gas and Electric.

How the company will finance Rice Solar remains to be seen. The company was hoping to get a federal loan guarantee for Rice Solar, but the DOE ended the loan guarantee program last month without approving financing for Rice Solar. SolarReserve also has a 150 MW project in Arizona. Other previous corporate fundraising efforts by SolarReserve have included a $20 million round announced earlier this year.

SolarReserve isn’t only interested in developing solar thermal power plants. Last November, the company said it would team up with Chinese polysilicon producer GCL-Poly Energy to develop power plants in the U.S. using solar panels. GCL owns a 20 MW solar farm in China. Some solar developers have recently switched to installing solar panels for utility power plants, instead of using solar thermal, because of the drop in solar panel prices and because it can take a long time for solar thermal plants to get approval.

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“Don’t mess with the solar industry” was a rallying cry used by Rhone Resch, CEO of the Solar Energy Industries Association, during a Monday evening speech to kick off the annual Solar Power International trade show.

“There are those out there who dismiss solar outright. Rush Limbaugh says that the solar industry doesn’t even exist. We should invite him to walk the floor in the next couple of days,” Resch said.

Resch urged the audience to give more financial and other support to the association, including its political action committee, and announced changes that would add state-level lobbying to SEIA’s repertoire. He pointed to job creation and solar energy generation numbers.

A lot is at stake for the industry, which is experiencing a difficult year because it’s made way more products than the market can absorb. Changes to government incentives in the largest markets, such as Germany and Italy, earlier this year delayed installations and caused a pileup of several gigawatts of unused solar panels in warehouses. That led to a 30-40 percent drop in wholesale prices for these panels – some manufactures are likely selling at a loss. Many stalwarts in the industry, including First Solar, SunPower, Suntech Power and Q-Cells, all have seen a big drop in earnings this year.

But the U.S. solar market is set on a path to grow – analysts are predicting that solar panel installations will double in 2011. Resch touted the fact that the U.S. exports $1.9 billion more solar goods than it imports from the rest of the world, including China. Many states have rebates and other incentives to entice home and business owners to install solar, as well as rules requiring their utilities to buy an increasing amount of solar energy or renewable electricity in general.

But growth could slow in the U.S. if a popular federal grant program expires as scheduled on Dec. 31 this year. Solar project owners are entitled to claim 30 percent of the cost of their projects in cash from this program, which was part of the 2009 stimulus package and was meant to be a temporary measure to help the developers with financing when banks were struggling. Congress already extended the program by one year, but that was before Democrats lost control of the House to Republicans.

Solar executives are lobbying for at least one more year of extension, arguing that the economy hasn’t recovered as quickly as anticipated and banks will charge higher rates for their money without this federal incentive in place.

Solyndra's factory full of panels in April

Cloud of Solyndra

The Solyndra debacle, naturally, hasn’t helped with the effort to renew the grant program. The California manufacturer of novel solar panels used a $535 million federal loan guarantee to build a factory last year, only to file for bankruptcy last month largely because its products were too expensive, particularly when prices from its rivals were plummeting. Some Republicans in the House have used the company’s failure to question the Obama administration’s management of the loan program. Other critics are using Solyndra to show that government should scale back its investment in solar.

Addressing the impact of Solyndra’s controversy, Resch said, “It’s wrong to view the industry through the lens of just Solyndra.”

Since Solyndra announced it was going out of business, Resch and solar executives have held press conferences and issued reports and polls to shape the public’s perception of their industry. On Wednesday, six solar company executives will hold a press conference at the Dallas conference to discuss their views of the industry’s future. The subject line of their email invite read, “Solar fights back at Solar Power International.”

Photo courtesy of Abound Solar

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First Solar said the project, called Topaz Solar Farm, did qualify for the loan guarantee, and the award was conditionally given back in June, but said today “there was insufficient time to process all requirements before the Sept. 30, 2011 deadline.” The loan guarantee program is set to end on that day, and DOE is working on finalizing at least a dozen of the awards.

The company’s statement doesn’t adequately explain the holdup, and it’s not willing to provide more details about its application. But First Solar says it’s “in advanced talks regarding the sale and financing of the project with potential buyers utilizing a different transaction structure that does not require a DOE loan guarantee.”

The announcement comes at a time when the loan guarantee is under scrutiny because its first beneficiary, solar panel maker Solyndra, secured a $535 million loan guarantee to build a factory but then went bankrupt. House Republicans are now investigating whether Solyndra qualified to receive the loan guarantee or lied to lawmakers when it assured them just a few months back that the company was doing fine. That scrutiny has prompted pundits to wonder if other companies that are seeking loan guarantees will find it more difficult to secure them.

Still, First Solar is not Solyndra. First Solar, which makes solar panels and develops utility-scale projects, is one of the largest solar panel makers in the world and has demonstrated its ability to deliver projects to buyers.

It’s possible that the DOE is taking extra steps to review its remaining loan guarantee offers in order to be able to defend its decisions, and that caused a delay in finalizing the loan guarantee for Topaz. First Solar also could have asked for different terms than what it got earlier this year — or disagreed with new terms from the DOE.

Some companies have noted that the loan guarantee terms could be stifling. NRG’s CEO David Crane told us in spring this year that the government was asking for “more and more conservative terms.”

First Solar spokesman Alan Bernheimer said the company “wouldn’t speculate” about any connection between the Solyndra investigation and the Topaz loan guarantee application. Asked whether First Solar asked for different loan guarantee terms than what it received back in June, Bernheimer wrote in an email, “Not that I’m aware of.”

The DOE offered three loan guarantees totaling roughly $3.73 billion for three First Solar projects in June and another $976 million for the 290 MW Agua Caliente project in Arizona earlier. In August, First Solar finalized the loan guarantee for Agua Caliente and sold the project to NRG Energy. NRG bought a 21 MW project in California from First Solar in 2009.

First Solar said Thursday the pending loan guarantees for the other two projects, 230MW Antelope Valley Solar Ranch 1 and 550MW Desert Sunlight, “remain in the DOE process.” The company’s shares fell nearly 4 percent to reach $70.67 per share in recent trading.

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California-based SolarCity will install up to 371 MW of solar equipment in up to 124 military bases and 33 states, the DOE said. The SolarStrong Project, which could see solar panels cropping up on as many as 160,000 rooftops, will cost more than $1 billion, SolarCity said..

SolarCity plans to hire military veterans and their family members for some of the jobs that will be created by the project, and the job is expected to produce 750 construction jobs over the next five years and 28 full-time jobs to run and maintain the systems.

SolarCity said it will install, own and operate the solar systems. Military housing developers and management firms will buy the solar electricity via long-term contracts and are expecting to save energy costs over time to plow the savings into housing improvement projects, said Jonathan Bass, a spokesman for SolarCity. Military housing is privatized.

Although the loan guarantee is conditional – meaning it has yet to be finalized – SolarCity already has started on the project. It’s installing a 4 MW project at Hickam Air Force in Hawaii.

USRG Renewable Finance, part of US Renewables Group, will be the lead lender for the $344 million loan, along with Bank of America Merrill Lynch. The DOE didn’t say how much of the loan it will guarantee, but the program applied by USRG can guarantee up to 80 percent of a loan. The program, Financial Institution Partnership Program (FIPP), is different from the one from which DOE issued the now infamous $535 million loan guarantee to Solyndra, which filed for bankruptcy yesterday. Solyndra didn’t use the guarantee to line up a lender in the private banking sector, and instead it received the loan from the Treasury-run Federal Financing Bank.

Both sources of funding came from an umbrella fund Congress created two years ago to create jobs and promote clean energy production. The fund, commonly referred to as Section 1705, is expiring at the end of this month, and all the companies that have yet to finalize their Section 1705 loan guarantees will have until then to do so and start construction, or else they’ll lose the financial support. One company, Calisolar, bowed out of the application process after securing a $275 million loan guarantee because it reportedly didn’t think it could start the solar factory project to meet the deadline.

The U.S. military has an opportunity to become a major consumer of clean energy and biofuels. Here are seven ways the military is embracing cleantech.

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The news is both surprising and, in a way, not so unexpected. The company already snagged a federal loan guarantee offer worth $2.1 billion to help build the first 500 MW of the project, and it was supposed to close that deal by Sept. 30 of this year. Solar Trust also already held a ground-breaking ceremony for the project in June of this year that included political bigwigs such as Interior Secretary Ken Salazar and California Gov. Jerry Brown.

Solar Trust’s original plan was to use a solar thermal technology that uses mirrors to concentrate and direct the sunlight to heat up water for producing steam, which is then used to drive turbines to generate electricity. PV technology, on the other hand, uses solar panels. Solar Trust secured permits for the project, called Blythe Solar Power Project, from both the California Energy Commission and BLM last year.

No more loan guarantee

The change of technology means the company is foregoing the loan guarantee and will look for private cash and loans for the project, said Edward Sullivan, the VP of external affairs at Solar Trust. As we have noted before, PV technology offers some advantages that solar thermal doesn’t have in terms of project size and land use choices, which in turn affect a project’s development cost. Solar panel prices also have fallen by more than half in the past two years, making them a more attractive choice for developers. Sullivan noted that private financing for PV projects is readily available.

Developers of several solar farms in California have already announced plans to switch from solar thermal to PV, including the Calico Solar Project and the Imperial Valley Solar Project. NRG, which has invested in a solar thermal power plant by BrightSource Energy, replaced two solar thermal power plant projects in favor of using solar panels.

Solar Trust will ask the federal Bureau of Land Management to amend its permit, Sullivan said. Solar Trust will keep doing some site preparation work for Blythe, but full-scale construction won’t start until the third quarter of next year, he added.

Going through that permitting process must have been costly, especially for a project this size. If it had chosen to use solar panels back then, then it wouldn’t have had to be under review by the energy commission, which oversees solar thermal power plants that are 50 MW or larger. The energy commission doesn’t issue permits for projects using solar panels – that task belongs to the counties or cities in which the projects reside.

Thermal to PV trend

Solar Trust became interested in developing projects using solar panels more recently. Back in May of this year, the company said it was creating a joint venture with Germany-based SolarHybrid to develop large-scale PV projects. Solar Trust, based in Oakland, Calif., is itself a joint venture formed in 2009 between two German firms, Solar Millennium and Ferrostaal. Solar Millennium develops solar thermal technology.

At the time of the joint venture announcement with SolarHybrid, Solar Trust’s CEO, Uwe T. Schmidt, said the company would consider using both solar thermal and PV equipment for the same project if that is more cost-efficient way to do it.

The technology choice for the second 500 MW of the Blythe project is yet to be determined, Sullivan said.

“We are a pragmatic and responsive company. We will assess market reality for the second half of the project when the time comes,” Sullivan said.

Photo courtesy of Oregon Department of Transportation, NREL, via Flickr

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But according to correspondence with the Security & Exchange Commission dated June 1 (which was either just released or I just noticed), KiOR says that on May 15 it “voluntarily requested” to have its loan application placed on hold under the 2011 loan guarantee program and placed in line for consideration for a 2012 program. Depending on the DOE 2012 budget, it remains to be seen how much funding the loan guarantee program will get for 2012, or if it will get any at all.

KiOR’s legal council says in the June 1 letter that it asked the DOE to put the application on hold after the DOE loan guarantee program sent it a letter on May 10, notifying KiOR that it was “continuing consideration” of its application and that it had set June 16 as a date for its “application completion deadline.”

KiOR says that in that May 10 letter, the DOE also told loan guarantee applicants that any companies that received loan guarantee commitments had to obtain the underlying loan, and start construction on the project being funded, before September 30 of that year. KiOR says in its June 1 letter that the September 30 deadline “presented potential execution hurdles in light of the Company’s other projects, including the pending IPO.”

KiOR also said in the June 1 letter that it believed that in 2012 it would be able to find loan terms “at least comparable to those offered by the DOE,” given KiOR says it started building its initial-scale commercial production in the first quarter of 2011 and plans to start construction of a larger commercial production facility in the third quarter of 2012.

Clearly KiOR was in a hurry to get its IPO out earlier this year, and in the summer of 2011 it has been experiencing an IPO window for a variety of companies, from web firms to biofuel makers. KiOR debuted on the Nasdaq on June 24, a week and a day after the June 16 deadline date that the DOE gave it to finish its loan guarantee application. In correspondence KiOR and its underwriters asked the SEC to accelerate its S-1 filing process.

In correspondence between KiOR and the SEC (dated May 27), the SEC asks KiOR questions about an amendment to an S-1 removing discussion of the loan guarantee application (though the latest S-1 on the SEC’s website still discusses the loan guarantee in question).

We note that throughout your registration statement, you have deleted discussions related to the Department of Energy loan guarantee. Please tell us why you have deleted these discussions. To the extent that this guarantee is no longer viable, please tell us what impact, if any, you expect this to have on your liquidity generally and your plans to construct standard commercial production facilities specifically.

KiOR’s stock took a beating in the overall market sell-off today, in the first day of trading after Standard & Poor downgraded the credit ratings of credit agencies. KiOR’s stock dropped 15.74 percent.

Entities affiliated with Khosla Ventures owned 74.8 percent of KiOR’s combined Class B and Class A common stock post-IPO, and they held 72.4 percent of the combined voting power of Class A & B common stock. Investors typically have a 180-day lock-up period before they can get cash out of their shares.

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