Report: Konarka’s failure wasn’t a solar market problem

Katie Fehrenbacher — Thu, 07 Jun 2012 12:05:54 +0000

Solar startup Konarka’s bankruptcy, announced last week, wasn’t just the latest case of the solar industry being hit by the dropping cost of silicon, and cheap modules and panels from China. The company’s technology was just weak and “could not compete on cost, efficiency, or lifetime,” says Lux Research.

Lux Research says for at least three years it’s given Konarka a “strong caution” rating for its technology that was “ten times higher cost, and ten times lower efficiency and lifetime compared to alternative solar technologies.” More than technology development, Konarka’s skill was in fund raising, says Lux Research, and its “underlying technology was never market ready.” Lux writes:

Driven by the promise of cheap, printed solar modules that can be made colorful and transparent, technically unsavvy investors rushed to invest in Massachusetts organic photovoltaic developer Konarka to the tune of $170 million, with an additional $30 million coming from grant funding. Konarka took that investment and built what it claimed was a 1 GW manufacturing line, although the line would certainly never come close to that capacity.

We, too, have long been skeptical of Konarka. It’s amazing that Lux points out that Konarka finally went bankrupt “in the middle of yet another funding round.” Here’s a list of investors that Konarka managed to raise money from: Konica Minolta, Draper Fisher Jurvetson, Good Energies, 3i, Mackenzie Financial Corp., Pegasus Capital, Asenqua Ventures, New Enterprise Associates, Vanguard Ventures, Chevron Ventures, Massachusetts Green Energy Fund, NGEN Partners, Angeleno Group, Total, Good Energies, and 3i.

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Organic solar thin film maker Konarka files for bankruptcy

Ucilia Wang — Fri, 01 Jun 2012 23:00:03 +0000

Konarka Technologies, a maker of organic solar thin films, said Friday it’s going bankrupt, an announcement that may not be so surprising to many who have watched and waited for the venture-backed company to try to build a viable business.

The Massachusetts company filed for Chapter 7 and plans to liquidate its assets to pay back creditors. The company developed organic thin films that it wanted to see installed as part of building façades, and despite raising close to $200 million by our last count, it struggled to find success.

The fact that Konarka, founded in 2001, has lasted this long has been puzzling to some. The low efficiency of organic thin films – the company was selling products that could convert only a few percent of the sunlight that falls on them into electricity as of last year – and the difficulties of finding buyers in the building design and construction market have been persistent challenges for Konarka over the years.

Konarka’s technology used a photo-reactive material printed onto plastic, and they are quite different from the silicon or cadmium-telluride semiconductors used in conventional solar cells today. Instead of encasing the films in glass like other solar panels on the market, Konarka makes its films in protective polymer layers so that they are flexible.

“Konarka has been unable to obtain additional financing, and given its current financial condition, it is unable to continue operations. This is a tragedy for Konarka’s shareholders and employees and for the development of alternative energy in the United States,” said Howard Berke, chairman and CEO of Konarka, in a statement.

Konarka was able to sell its organic thin films for lining umbrellas and shoulder bags, but it wasn’t clear whether these sales and shipments amounted to any significant volumes. Konarka marketed its thin films to architects and builders in the building-integrated photovoltaic (BIPV) market, which has barely emerged and is a tough market to crack. Architects like the idea of adding eco-friendly features, but they tend to balk at the added expense and worry about the logistics of embedding, operating and replacing electrical equipment that isn’t likely to last as long as the buildings. The lackluster housing market in the past few years also hasn’t helped.

In 2010, the company raised $20 million from Konica Minolta, which wanted build a manufacturing joint venture in Japan. Konarka had lined up many other investors, too, including Draper Fisher Jurvetson, Good Energies, 3i, Mackenzie Financial Corp., Pegasus Capital, Asenqua Ventures, New Enterprise Associates , Vanguard Ventures, Chevron Ventures, Massachusetts Green Energy Fund, NGEN Partners, Angeleno Group and Total, the French oil and gas giant who invested $45 million in 2008.

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Report: Konarka’s failure wasn’t a solar market problem

Organic solar thin film maker Konarka files for bankruptcy