IBJNews

Abound failure raises questions anew about Obama policies

Back to TopCommentsE-mailPrintBookmark and Share

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.
 

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. Hello Dear Are you tired of Seeking Loans and Mortgages,have you Been Turned down constantly By your banks and Other Financial Institutions or Micro Finance scheme. This is let you know with 100% guarantee that we Offer loans ranging from $1,000 Minimum to $1,000,000.00 Maximum at 3% interest rate per Month. We give out LOANS for developing business. a competitive edge/business expansion. email address: michealscottloan124@gmail.com We offer the following kinds of loans and many more; * Personal Loans ( Unsecured Loan) * Business Loans ( Unsecured Loan) * Consolidation Loan * Combination Loan * Home Improvement * Xmas Loans for contact to seek for loan email this email address: michealscottloan124@gmail.com Thanks

  2. My name is Mr Henry Josh and i live in the USA California and life is worth living right now for me and my family and all this is because of one man sent by GOD to help me and my family, i once had a life filled with sorrow because my first SON needed a kidney transplant and all our savings were going towards his medications and this normally leaves us with no money to pay our bills or even put enough food on our table and our rent was due and no funds to pay these bills and life felt so unfair to me and every night my wife will cry herself to sleep every night until one day, i was browsing through yahoo answers and i saw a striking advert of a man that gives out personal loans and that the offer is opened to all and i have heard so many things about internet scams but at this point of my life, i was very desperate and ready to take any risk and at the end of the day, i applied for this loan and from one step to another, i got my loan within 12 hours through bank transfer and you know, it was all like a dream and i called Mr Daniel Jones A Man who is the GOD sent lender i found and said, i have received my loan and he smiled stating that to GOD be the glory and i was so shocked as i have never ever seen anyone with such a GOD fearing and kind heart and today, i am the happiest man on earth because by GOD’S grace, my SON kidney transplant was successful and today he is healthy, i and my family are living very comfortable and happy and if you are in my former situation or in serious and legitimate need of a loan, you can reach this GOD sent lender via fidelityloanfirm@outlook.com

  3. Greetings to everyone reading this comment!!! I am Greg William by name. I am out here to recommend the effort of Mark Oscar,I was in need of a consolidation loan amount of 50,000 and as soon as I got in contact with Mark Oscar Loan Firm on Wednesday last week and on Friday last week as well I receive an alert from my bank(Royal Bank of Scotland Group) that the fund was transferred,I want everybody on this site to contact Mark Oscar now via email on how to get a loan because I got my loan from them and I am very happy,so contact them now. Oscarloanfinance@hotmail.com Thanks!!!!!!

  4. Elected officials, like Mourdock, get vested in 8 years. It takes 10 years for all other public employees, most of whom make a lot less money. So much for the promise to finish out his term.

  5. Great state treasurer and a good man!! Just curious if the folks who didn't quite understand his quote would like to tell my daughter-in-law that God didn't intend her! Mourdock's comment was correct but twisted and the article didn't mention that his opponent and the press let the impression stand that Mourdock meant that the rape was intended. Stupid people!!

ADVERTISEMENT