Loan recipient Abound Solar to close

June 29, 2012 at 1:03 PM
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LOVELAND, Colo., June 29 (UPI) -- Solar panel manufacturer Abound Solar, recipient of a U.S. Department of Energy loan, will suspend operations and file for bankruptcy, the company said.

Abound's bankruptcy comes less than a year after California solar-panel firm Solyndra, recipient of a $535 million Energy Department loan guarantee, went bankrupt, further escalating controversy over the Obama administration's clean energy investments.

The Colorado manufacturer of thin-film cadmium telluride – or CdTe -- photovoltaic modules received a $400 million loan guarantee from the Energy Department in July 2010 for expanding its Colorado plant and to renovate a former auto parts plant in Indiana for producing solar panels.

About 125 employees will lose jobs because of the closure, Abound said in a statement. In February, Abound slashed its workforce by about 70 percent, firing 180 full-time and 100 temporary workers.

In its statement Thursday, the company said "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."

Abound said it had been in discussions with potential buyers over the last several months but was unable to reach an agreement with any of them.

Energy Department spokesman Damien LaVera, in a statement posted on the department's Web site, said that the agency only disbursed $70 million to Abound.

Noting that Abound failed to meet some of the financial targets built into the loan agreement, LaVera said the department halted funding on the $400 million loan last September.

LaVera acknowledged that "investing in innovative companies … carries some risk."

"When the floor fell out on the price of solar panels, Abound's product was no longer cost competitive," he wrote.

After Abound's bankruptcy liquidation, LaVera said, the Energy Department expects the total loss to taxpayers to be 10-15 percent of the original $400 million loan amount.

Reacting to Abound's demise, U.S. Rep. Jim Jordan, R-Ohio, chairman of the House Government Reform and Oversight Committee's subcommittee on regulatory affairs, stimulus oversight and government spending, was quoted by The New York Times as saying, "Our government is not good at picking winners and losers in the marketplace but has certainly proved it is good at wasting taxpayer dollars."

Abound Solar Chief Executive Officer Craig Witsoe, appearing last month before the House Oversight and Government Reform Committee regarding the Department of Energy loan, cited "severe market pricing conditions" and said the company had delayed moving forward with the planned construction on the Colorado and Indiana facilities.

He had said Abound is one of only three companies worldwide with significant CdTe manufacturing experience, besides First Solar and General Electric.

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