The New York Times (s nyt) posted the news on Tuesday night. Solyndra received a federal loan of $535 million last year to build its second factory, which it had aimed to have 500 megawatts of annual production capacity. The Obama administration held up Solyndra as an example of a home-grown cutting-edge technology developer that would deliver lots of green jobs through its factory expansion plan and more than $2 billion in announced sales deals.
Instead, Solyndra CEO Brian Harrison — who joined the company only recently, replacing the founding CEO — told the Times that the company plans to let go about 40 employees and will not renew contracts for 150 temporary workers. (The company said Wednesday morning the number is actually 135.) The Fremont, Calif., company will shutter its first factory to save at least $60 million in capital spending. Instead of boosting its overall production capacity to 610 megawatts by 2013, it’s now looking at up to 300 megawatts by then: less than half the original plan.
Harrison said the company needed to come up with a new plan to deal with the intensifying competition from solar panel makers, particularly those in China, that boast large factories for producing cheaper products.
Solyndra has completed the construction of the second factory building, but as of a few weeks ago, it hadn’t started production. Company spokesman David Miller told me during Solar Power International (SPI) in mid-October that the company was putting in equipment on the factory floor. Production is set to start before the end of the year.
Here is an excerpt from a company statement issued Wednesday morning:
“There is a clear need for more aggressive pricing. This plan allows us to stay very competitive on a fully installed cost basis with all in pricing next year around $3.50 a watt which we believe will be highly competitive or even lower than (silicon module-based system) pricing. We expect this plan will allow us to double shipments next year and take us to cash-flow positive by the end of 2011.”
The company has been an interesting one to watch because its solar panel designs are so different from the more common, silicon solar panels. Its copper-indium-gallium-selenide solar cells are lined up inside tubes to take advantage of the reflected light from the rooftop or the ground. The company also has engineered its own racking system to support the panels, a design it says can shave installation costs. Solyndra unveiled a new panel and racking system during SPI.
Financially, the company has not only snagged a huge federal loan; it also has raised $198 million in private equity to build its second factory. As of October 2009, the company had raised about $970 million in equity.
Solyndra also wanted to raise even more money through an initial public offering. But it canceled it in June, citing poor market conditions. Instead of raising as much as $300 million through the IPO, the company said it would instead sell $175 million worth of convertible notes to exiting investors to get the money it needed to make and deliver the goods to its long list of customers.
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