Solar Panel Start-Up To Receive $197 Million Government Loan
by Chris Greenhough
Solar panel start-up SoloPower has been awarded a $197 million government loan guarantee from the same program that backed the flopped panel maker Solyndra.
The tiny solar panel start-up will begin production at a US factory on Thursday, but already concerns about the similarities between SoloPower and Solyndra are being voiced. Solyndra was infamously granted more than $500 million in government loans before it filed for bankruptcy in 2011.
Critics of the loan point out that, much like Solyndra, SoloPower is a Silicon Valley start-up that uses the same non-traditional raw material in its solar panels. Skeptics also argue that SoloPower is entering the market when it is already overloaded with cheap solar products manufactured in China.
Many companies that make the panels are now said to be clinging to survival. Even the biggest player in the international market, China’s Suntech Power Holdings Inc, warned last week that it may be delisted by the New York Stock Exchange due its share price —which reached $90 in 2008 — plummeted to less than $1.
However, despite the doom and gloom around the solar panel industry, global demand for photovoltaic solar installations is still expected to increase by 8 per cent this year.
Loan guarantees are awarded as part of the Department of Energy’s $35 billion program to support emerging clean energy technologies. SoloPower is the fourth US panel manufacturer to clinch such a guarantee.
Should SoloPower endure the same fate as Solyndra, President Barack Obama will be put under increasing pressure to prove the worth of the program.
The Republican-controlled US House of Representatives passed a ‘No More Solyndras” bill earlier this month in a bid to wind down the energy loans program. However, said bill is unlikely to be accepted by the US Senate or signed by President Obama.
Solar power company banks on loan, but skeptics question government investment in industry
The federal government is making another big bet on solar panel manufacturing with taxpayer money, hoping the third time will be the charm.
SoloPower held its grand opening Thursday in Portland, Ore., with speeches from local politicians and a ribbon-cutting. “It really revolutionizes rooftop applications, and it makes solar both easy and cost effective for nearly any commercial and industrial building worldwide,” CEO Tim Harris said.
SoloPower closed on a guaranteed government loan of $197 million last August, about the time another solar panel manufacturer, Solyndra, filed for bankruptcy. The failure of Solyndra cost U.S. taxpayers more than a half-billion dollars.
The second solar panel maker that received a loan from the Department of Energy, Abound, is also now in bankruptcy. Based in Longmont, Colo., Abound spent $70 million of its green energy loan and next week will auction off its equipment in hopes of paying some of that back.
Industry analysts are not optimistic about SoloPower’s prospects.
“It’s questionable at this point,” says Andrew Soare of Lux Research, “It’s uncertain if solar power will be able to produce efficiently and economically at scale. It’s something that has not been done yet, and it’s still risky.”
Soare points to the price advantage enjoyed by Chinese manufacturers which has helped them grab a majority of the U.S. market share. Chinese solar panels are about 30 percent cheaper than ones made in America. The Commerce Department is urging President Obama to slap a tariff on Chines imports.
But SoloPower doesn’t view China as competitors because they make far different products. SoloPower manufacturers “thin film,” flexible and lightweight panels that can be installed on large commercial and industrial rooftops.
Environmental groups continue to support the federal green power loan program.
“We’re just on the cusp of a whole revolution,” says Ross Macfarlane of Climate Solutions. “Many (companies) will fail, but the key ones will succeed and they’re going to lead us.”
But William Yeatman of the Competitive Enterprise Institute says the Energy Department’s green loan program created with federal stimulus money has been a failure by any measure. Congress appropriated $4.5 billion for it. Solar panel bankruptcies alone have cost taxpayers $600 million and if SoloPower stumbles, the losses will go even higher. A fourth company, 1366 Technologies, received a $150 million loan but has not even built its manufacturing plant yet.
Yeatman has little faith in SoloPower: “It looks like it will fail for the same reasons as Solyndra.”
Much of the debate following Solyndra’s collapse has centered on government’s role in emerging technologies. Green groups say government has supported the oil industry through tax breaks, so it’s essential to help alternative fuels to wean us off carbon.
But John Charles of the Cascade Policy Institute said government just gets in the way.
“It’s a terrible risk,” Charles said. “This is a program that should not even exist, even if the risk was low. It is not a proper function of government to be a venture capital fund.”
SoloPower expects to start spending the taxpayer money late this year.
