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Abound Solar undeterred by rivals' bankruptcies

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The Aug. 31 bankruptcy and shutdown of California-based Solyndra, a government-backed maker of solar panels, is prompting a flurry of questions in Tipton about the future of Abound Solar.

Like Solyndra, Colorado-based Abound won a federal loan guarantee from the U.S. Department of Energy, partly to expand its panel-making operation to the massive, unused Getrag transmission plant in Tipton.

Abound officials are quick to reassure that the company is on track with its original business plan, which calls for adding a huge amount of manufacturing capacity in Tipton in 2012 or 2013 and hiring 900 to 1,200 people.

County Commissioner Jane Harper said she fielded enough questions from locals that she decided to write Abound CEO Tom Tiller.

“The thing about them is, they have been so open and transparent,” she said. “I really feel if there was a red flag on the horizon, they would have said something by now.”

Abound has added a second production line to its Colorado facility and plans to add a third line there next year, said Julian Hawkins, senior vice president of sales and marketing.

Abound won’t build out in Tipton until after it has reached capacity in Colorado.

Hawkins admits the company, like all solar-panel makers, faced sudden price pressure this year.

“Would I like this to happen later? Yes,” he said of the plunge in prices. “Is it going to kill the company? No.”

Solyndra was the last of three solar-panel makers to declare bankruptcy in August. The other two were Evergreen Inc. of Massachusetts and SpectraWatt of New York.

Abound uses a different technology from Solyndra, and it has a different business model. But it’s backed by the same Energy Department team that appears to have rushed into supporting Solyndra without a thorough review of its business. Solyndra’s failure leaves taxpayers on the hook for more than $500 million.

“What we hope is that DOE will look at this as something to learn from going forward,” said Frank Rusco, author of a July 2010 U.S. Government Accountability Office report on the loan-guarantee program.

In five out of 10 cases, Energy Department officials issued conditional loan commitments before receiving all the required reports from outside experts, the GAO found. In one case, the DOE fast-tracked approval, despite not having any expert reports in-hand.

Rusco has declined to name the five companies, but other sources identified Solyndra as one of them.

The Energy Department has disagreed with the GAO’s finding that applicants weren’t treated consistently.

Republicans in Congress are decrying the DOE’s losing bet on Solyndra as a result of pressure from Obama’s administration, which has focused on creating jobs through green technology.

Hawkins says Abound received plenty of scrutiny from the DOE, and it’s capable of surviving the demand shift that drove prices down.

Abound received a $400 million conditional commitment in July 2010—support President Obama highlighted in a national radio address.

“They were overly diligent, in terms of information we would normally provide investors,” he said of the Energy Department during Abound’s 18-month application process.

“Abound from the outset was focused on low-price, high-volume solar,” Hawkins said.

Abound uses cadmium-telluride, which is cheaper than silicon, to make thin-film panels.

Government subsidies in Germany, Italy and France were propping up prices, but those programs came under review early this year, Hawkins said. Projects in Germany and Italy have resumed, though at lower prices, he said. Meanwhile, Abound has landed customers in India.

Abound has drawn a fraction of its financing, which is from both the federal government and private sources. All the federal money must be spent on adding manufacturing capacity, with the first $100 million designated for Colorado.•

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