By Kari Williamson
Solyndra says the situation is the result of global economic and solar industry market conditions with increasing competition from foreign manufacturers, global oversupply of solar PV panels and decreasing prices.
Solyndra President and CEO, Brian Harrison, says: “Regulatory and policy uncertainties in recent months created significant near-term excess supply and price erosion. Rising incremental capital and this environment was not possible. This was an unexpected outcome and is most unfortunate.”
Questions over DoE programme
The bankruptcy of Solyndra, which previously received a US$535 million loan guarantee from the US Department of Energy, has added fuel to the debate around the choices made by those determining who gets Federal loans and loan guarantees.
Media reports point to the fact that Solyndra apparently got loans at a lower interest rate than any other recipient of DoE Section 1705 loan guarantee, asking why this was the case.
Bloomberg has also pointed out that Solyndra is the third US solar manufacturer to fail in one month in the US.
Already in 2010, Solyndra downsized its planned growth and pulled its IPO.
DoE says all investments entail some risk
Defending DoE's investments, the Department's Director of the Office of Public Affairs, Dan Leistikow, has issued a statement saying every transaction undergoes “months of extensive and careful export review to minimise risk,” but that all investments in innovation have an element of risk. He warns that if DoE never took risks and invested in innovation, the rest of the world would pass the US by.
As Solyndra, Leistikow says there is intense competition for US solar manufacturers from China where companies receive interest free government financing. Furthermore, solar cell prices have dropped 42% since the beginning of the year at the same time as Europe has reduced subsidies.
“The changing economics have affected a number of solar manufacturers in recent months, including unfortunately, Solyndra, a once very promising company that has increased its sales revenue by 2000% in three years and sold more than 1000 installations in 20 countries.”
He adds: “We have always recognised 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. These projects, which include more than 40 other companies, are on pace to create more than 60,000 jobs.”
SEIA: Solar industry still healthy
The bankruptcy of Solyndra has also attracted a comment from the Solar Energy Industries Association (SEIA) President and CEO, Rhone Resch:
“The loss of any manufacturing jobs – in solar or otherwise – is disappointing, but it is important to look at an industry's health more broadly rather than through the narrow lens of one company's success or failure.”
He is keen to stress that the solar industry is still going strong: “Today, the solar industry is one of the fastest growing industries, employing nearly 100,000 Americans at more than 5500 companies across the supply chain in every region of the country.
“What we are seeing in solar happens in every industry that is maturing and growing more competitive. You're going to see winners emerge who find innovative ways to offer consumers the most competitively priced products.
“The last 12 months have seen one of the most dramatic price drops in the history of the solar market. Already in 2011, the cost of solar PV panels has come down by 30%.
“Competition in the solar industry is good for American consumers. It means that costs are coming down and solar is increasingly affordable for more and more Americans every day.”