America's solar flame-out  

Posted by Big Gav in , ,

The Climate Spectator has a roundup of commentary on the bankruptcy of Solyndra and the challenges facing America’s solar power industry - America's solar flame-out.

The news last week of the bankruptcy of US thin-film solar startup Solyndra – a company that was backed by high profile venture capitalists and visited in person by President Barack Obama, who declared it a green jobs powerhouse while his administration directed half a billion dollars in loan guarantees its way – is being taken pretty badly in American cleantech circles. "One heck of a bummer," is how Salon's Andrew Leonard has put it; while Forbes' Todd Woody described it as the country's "biggest green-tech flameout yet."

Solyndra closed for business and dispensed with 1,100 workers on Wednesday, just one year after opening its cutting edge robotic factory that was funded using $US1 billion-plus from investors, and the half billion from government loans. The company now plans to file for Chapter 11 bankruptcy while exploring a sale of the business or licensing its thin-film photovoltaic technology. And while the collapse will no doubt raise questions in the minds of investors and the US government, what this means for the US solar industry as a whole is the really big issue. ...

Solyndra's technology began attracting a lot of attention in 2008, wrote Fehrenbacher in May, when it started making its unusual designs and business plans public. Its solar panels are made up of a series of tubes lined with copper-indium-gallium-selenide solar cells. They have an average efficiency of up to 12.7 per cent, but only when they're rolled flat, says Solyndra’s spokesman Dave Miller, otherwise they have around 10 per cent efficiency – and apparently they also work best on white-coloured roofs. But considering the firm's central innovation was that its panels avoided the use of silicon – something that proved far less important when refined silicon prices collapsed – it's "all too easy to see why Solyndra proved to be a bad bet," say Jesse Jenkins, Devon Swezey, and Alex Trembath in Forbes.

The real take-away from the Solyndra story is this, says Woody: "Can US companies developing advanced solar technology compete against low-cost Chinese manufacturers who benefit from state support and a government policy to create markets at home and abroad for their products? And given the shellacking taken by Solyndra’s investors – who include Richard Branson, the Walton family and Silicon Valley venture capital firms such as CMEA and US Venture Partners – will VCs be willing to place future bets on high-tech renewable energy startups or continue to back companies such as Nanosolar and MiaSolĂ©?"

Woody points out that, since Solyndra’s launch, conventional solar module prices have fallen 70 per cent. "The company simply could not increase production fast enough to lower the higher cost of manufacturing its high-tech modules," he says.

The NYT reports that China is succeeding where the US is failing, dominating solar power production - China Benefits as U.S. Solar Industry Withers.
The bankruptcies of three American solar power companies in the last month, including Solyndra of California on Wednesday, have left China’s industry with a dominant sales position — almost three-fifths of the world’s production capacity — and rapidly declining costs.

Some American, Japanese and European solar companies still have a technological edge over Chinese rivals, but seldom a cost advantage, according to industry analysts. Loans at very low rates from state-owned banks in Beijing, cheap or free land from local and provincial governments across China, huge economies of scale and other cost advantages have transformed China from a minor player in the solar power industry just a few years ago into the main producer of an increasingly competitive source of electricity. …

Besides Solyndra, the other two American manufacturers that filed for bankruptcy in August were Evergreen Solar, of Massachusetts, and SpectraWatt, a New York company. Another company, BP Solar, halted manufacturing at its complex in Frederick, Md., last spring.
Those bankruptcies and closings represent almost one-fifth of the solar panel manufacturing capacity in the United States, according to GTM Research. ...

Solyndra and Evergreen in particular suffered because they pursued unusual technologies whose competitiveness depended on their using less polysilicon, the main material for solar panels. That has become less important because polysilicon prices have tumbled more than 80 percent in the last three years as output has caught up with demand.

Analysts say that two American companies remain strongly placed. One is First Solar, the largest American manufacturer, which uses a different technology but has its biggest factory in Malaysia. The other, SunPower, is much smaller but is an industry leader in the efficiency with which its panels convert sunlight into electricity, so that they sell at a premium to Chinese panels. ...

Solyndra and Evergreen in particular suffered because they pursued unusual technologies whose competitiveness depended on their using less polysilicon, the main material for solar panels. That has become less important because polysilicon prices have tumbled more than 80 percent in the last three years as output has caught up with demand.

Analysts say that two American companies remain strongly placed. One is First Solar, the largest American manufacturer, which uses a different technology but has its biggest factory in Malaysia. The other, SunPower, is much smaller but is an industry leader in the efficiency with which its panels convert sunlight into electricity, so that they sell at a premium to Chinese panels.

Bloomberg reports that German solar companies are struggling against Chinese competition as well - Solar Purge Drives Weakest Into Buyouts, to Spur More Deals.
The solar-equipment industry has begun its biggest consolidation in at least two years as photovoltaic systems plunge in price, forcing weaker companies to team with competitors or close shop.

Mergers and acquisitions announced so far total $3.3 billion, up 33 percent from the $2.47 billion in all of last year, data compiled by Bloomberg show. Evergreen Solar Inc. (ESLR) today set a Sept. 20 meeting in a Delaware court for creditors owed $456 million. German solar-panel maker Q-Cells SE (QCE), which has convertible bonds trading at a 64 percent discount to face value, has said it’s open to takeover bids.

Tumbling solar-cell prices are provoking deals. Their 42 percent drop in 2011, stemming from tougher Chinese competition and declining solar-energy incentives in Europe, contributed to California’s Sunpower Corp. (SPWRA) and Roth & Rau AG (R8R) of Germany agreeing to takeovers. Ascent Solar Inc. took a Chinese partner.

“Weaker companies who did not get their product costs down to competitive levels are going to disappear," said Christopher Blansett, an analyst for JP Morgan Securities LLC. “They’ll be bought up. They’ll go away. There is significantly more supply of solar modules than demand."

A sell-off in solar stocks has made acquisitions cheaper. The Bloomberg Industries Global Large Solar Index dropped 36 percent this year through yesterday, compared with a 3.8 percent decline in the Standard & Poor’s 500 Index in that period. ...

Other German solar companies are struggling. Solon SE (SOO1) said on Aug. 16 that it will cut 15 percent of its jobs after inventory rose 45 percent in the first quarter to 160 million euros ($230 million) from a year earlier.

Solar Millennium AG (S2M), a German developer of solar-thermal power plants, said today it’s seeking a strategic investor to buy as much as 25 percent of the company, and it’s talking to banks about arranging bridge financing.

Roth & Rau, the German maker of solar-cell manufacturing equipment, agreed in April to a takeover by Swiss competitor Meyer Burger Technology AG, after first-quarter inventory more than tripled to 97 million euros.

Reuters reports that manufacturing silicon still seems to be economic in the US however - U.S. solar company plans $600 mln Mississippi plant.
A California solar company said on Friday it plans to build a $600 million silicon factory in Mississippi that will be backed by $75 million in incentives from the state. Calisolar will produce 16,000 metric tons of silicon at a factory in Columbus, Mississippi. The silicon will be sold to customers in the solar industry around the world, the company said in a statement. …

The United States is a net exporter of silicon for the solar industry, exporting $2.5 billion of the industry's raw material last year.

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