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Abound failure raises questions anew about Obama policies

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The failure of a second solar manufacturer that received loan guarantees from the U.S. Energy Department adds to pressure on President Barack Obama to justify incentives for the clean-energy industry that’s being undercut by Chinese competition.

Abound Solar Inc., a U.S. solar manufacturer that was awarded a $400 million loan guarantee in 2010, said Thursday it will suspend operations and file for bankruptcy next week. Colorado-based Abound had been planning to open a plant north of Indianapolis, in Tipton, that would employ up to 1,200 people by 2013, but those plans never got off the drawing board.

Abound said its thin-film panels couldn’t compete against Chinese products, the same reason cited by Solyndra LLC, which closed its doors in August after receiving a $535 million guarantee from the same program. Half of the four solar manufacturers that received loan guarantees have failed, supporting the argument that backing clean-energy is a mistake, according to Rep. Cliff Stearns.

“We know why they went bankrupt. We warned them they would go bankrupt,” Stearns, a Florida Republican, told reporters. “The larger question is why the administration was pursuing a green-energy policy in which companies are going bankrupt and wasting taxpayer money.”

Stearns is chairman of the House Energy and Commerce Committee’s oversight panel that has held hearings on the Energy Department’s loan guarantee program.

Rep. Jim Jordan, an Ohio Republican and chairman of the House Oversight and Government Reform Committee’s stimulus oversight panel that has investigated loan guarantees to solar companies, said Abound’s failure is further proof the Energy Department program was a mistake.

“It just adds to the weight of how ridiculous this was,” Jordan told reporters.

Abound plans to file for bankruptcy in Wilmington, Del., next week and will fire about 125 employees, according to a statement yesterday.

The company, based in Loveland, Colo., borrowed about $70 million against its guarantee. U.S. taxpayers may lose $40 million to $60 million on the loan after Abound’s assets are sold and the bankruptcy proceeding closes, Damien LaVera, an Energy Department spokesman, said in a prepared statement.

“When the floor fell out on the price of solar panels, Abound’s product was no longer cost competitive,” LaVera said.

Abound stopped production in February to focus on reducing costs after a global oversupply and increasing competition from China drove down the price of solar panels by half last year.

“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,” the company said in the statement.

Abound was awarded the loan guarantee to build two factories to make thin-film panels using cadmium telluride. It completed one plant, in Longmont, Colo., and never began construction on the second, which was planned for Tipton in the massive unused Getrag transmission plant. The company last received money from the Energy Department in August, before Solyndra’s collapse.

Rep. Dan Burton, an Indiana Republican, said he supported Abound because he thought the company would boost his state’s economy.

“We had a terrible economic problem. Plants were closing there in that area,” Burton told reporters Thursday. “We thought this would be a great way to create jobs. If I had known that Abound, or Solyndra, had been in the fiscal situation it was in, I certainly would have never supported it.”

“This is not surprising at all,” said Anthony Kim, an analyst at Bloomberg New Energy Finance in New York. “They were trying to sell to a competitive, over- supplied market with limited production. That keeps costs high.”

The Energy Department has provided almost $35 billion in loans, loan guarantees and conditional commitments to renewable-energy companies. About 35 percent of that is for solar- generating projects, which benefit from falling panel prices, compared with less than 4 percent for solar manufacturers, according to LaVera.

Besides Abound and Solyndra, two other solar manufacturers received loan guarantees. 1366 Technologies Inc. won approval to borrow as much as $150 million to produce polysilicon for solar panels and SoloPower Inc. was awarded a $197 million guarantee to make rolls of flexible solar panels using a copper-indium-gallium-selenide composite.

Neither 1366 nor SoloPower have drawn funding under the Energy Department program, LaVera said.
 

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  1. I think the poster was being sarcastic and only posting or making fun of what is usually posted on here about anything being built in BR or d'town for that matter.

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  3. So disappointed in WIBC. This is the last straw to lose a good local morning program. I used to be able to rely on WIBC to give me good local information, news, weather and traffic on my 45 minute commute.Two incidents when I needed local, accurate information regarding severe weather were the first signs I could not now rely on WIBC. I work weekend 12 hour nights for a downtown hospital. This past winter when we had the worst snowfall in my 50 years of life, I came home on a Sunday morning, went to sleep (because I was to go back in Sunday night for another 12 hour shift), and woke up around 1 p.m. to a house with no electricity. I keep an old battery powered radio around and turned on WIBC to see what was going on with the winter storm and the roads and the power outage. Sigh. Only policital stuff. Not even a break in to update on the winter storm warning. The second weather incident occurred when I was driving home during a severe thunderstorm a few months ago. I had already gotten a call from my husband that a tornado warning was just southwest of where I had been. I turned to WIBC to find out what direction the storm was headed so I could figure out a route home, only to find Rush on the air, and again, no breaking away from this stupidity to give me information. Thank God for my phone, which gave me the warning that I was driving in an area where a tornado was seen. Thanks for nothing WIBC. Good luck to you, Steve! We need more of you and not the politics of hatred that WIBC wants to shove at us. Good thing I have Satellite radio.

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