Abound Solar Inc., a Colorado-based solar manufacturer that once hoped to hire 1,200 people in Indiana by the end of 2013, will close its doors and file for bankruptcy because its panels are too expensive to compete with Chinese products, according to the U.S. Energy Department.
Abound, based in Loveland, Colo., received a $400 million loan guarantee from the federal government as part of a stimulus package in 2010 and borrowed about $70 million against that guarantee, according to the U.S. Energy Department.
Its failure would follow that of Solyndra LLC, which shut down last August after receiving a $535 million loan guarantee from the same Energy Department program.
Abound stopped production in February to focus on reducing costs after global oversupply and increasing competition from China drove down the price of solar panels by half last year.
Calls to Abound executives weren’t returned Thursday.
“When the floor fell out on the price of solar panels, Abound’s product was no longer cost competitive,” Damien LaVera, an Energy Department spokesman, said in a statement on the agency’s website.
U.S. taxpayers may lose as much as $30 million on the loan after Abound’s assets are sold and the bankruptcy proceeding closes, he estimated.
“This is not surprising at all,” Anthony Kim, an analyst at Bloomberg New Energy Finance in New York, said. “They were trying to sell to a competitive, over-supplied market with limited production. That keeps costs high.”
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, north of Indianapolis, in the massive, unused Getrag transmission plant.
Less than a year ago, Abound officials said the company was on track with its original business plan, which called for adding a huge amount of manufacturing capacity in Tipton in 2012 or 2013 and hiring 900 to 1,200 people. But officials also said they wouldn't start operations in Indiana until the company reached capacity in Colorado.
The Energy Department awarded loan guarantees to four solar manufacturers. The remaining recipients are 1366 Technologies Inc. and SoloPower Inc.
The agency 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.