U.S.-Backed Solar Panel Maker Folds

A Department of Energy-supported maker of innovative solar energy systems declared bankruptcy last week, laying off 1,100 workers at its Fremont, Calif., plant. The company, Solyndra, developed a unique tubular solar energy module, which it claimed would be cheaper to manufacture and install than conventional photovoltaic solar panels.

DOE and President Barack Obama agreed with the firm’s claim and two years ago, with much fanfare, offered it a $535 million loan guarantee, the first such guarantee made by the Administration. It is likely that most of that money will be lost to creditors, but details will be determined during bankruptcy proceedings.

In a statement, Solyndra said it could not achieve full-scale operations rapidly enough to compete with larger foreign manufacturers. It blamed a global oversupply of solar panels and low module prices, which is similar to causes cited recently by two other solar module manufacturers that shuttered their plants.

The company’s product was simply too expensive, costing more than twice the price of Chinese-made modules, notes Shyam Mehta, senior analyst at GTM Research, an energy research and information company. China is clearly the leader in the manufacture and sale of solar modules, he adds. Last year, the U.S. imported $2.4 billion in modules, mostly from China, and exported $1.2 billion in modules, according to a recent study by GTM.

However, the GTM study found that the U.S. had a favorable global balance of trade in solar products when sales of manufacturing equipment and raw materials are included. The U.S. imported $3.7 billion in all solar goods and exported $5.6 billion, which included a favorable trade balance with China of $240 million.

Contention over the government’s role in aiding energy companies like Solyndra is likely to heat up as Congress returns to session. DOE’s support of Solyndra is under investigation in the House of Representatives Energy & Commerce Committee, where Chairman Fred Upton (R-Mich.) underscored the company’s failure and promised to continue looking into why it received a loan guarantee.

But Rep. Henry A. Waxman (D-Calif.), ranking minority member of the same committee, saw the bankruptcy as demonstrating the need for greater federal support for U.S. clean energy industries.