Abound Solar, a company that manufactures thin-film panels using cadmium telluride and had received a federal government-backed loan guarantee is shutting down.
The company said in a June 28 news release that it intends to file a bankruptcy petition in Delaware within days. A suspension of operations will affect approximately 125 employees.
Abound Solar had received a $400mn federal loan guarantee in 2010, but had drawn down only $70mn of that by last September, when the Department of Energy stopped its support and said it had failed to reach financial benchmarks.
Its plant in Longmont, Colo., will be shut down soon and a second plant that had been planned at a former auto manufacturing facility in Tipton, Ind., never got off the ground.
The DOE noted the company’s collapse in a blog posted on June 28 by Deputy Director of Public Affairs Damien LaVera.
“When the floor fell out on the price of solar panels, Abound’s product was no longer cost competitive. As a result, the company was unable to meet some of the financial milestones built into the loan agreement to protect the taxpayers and – in September 2011 – the Department halted disbursements on the loan. Of the $400 million that Abound was originally approved for, the Department only lent the company less than $70 million,” LaVera wrote.
According to LaVera, DOE has protected more than 80% of the original loan amount. Once the bankruptcy liquidation is complete, the government expects the total loss to the taxpayer to be between 10 and 15% of the original loan amount, which would be $40mn to $60mn.
LaVera said Abound received widespread support from members of Congress and Senators from both parties and the private sector. As of December 2011, Abound had raised more than $300mn in private equity financing. Its backers included large and established energy investors — including BP Alternative Energy, the Invus Group, DCM and others.
Abound’s technology offered the promise of a lower cost alternative that would be built in the United States, LaVera added.
“Abound is appreciative of the significant investment from private investors and the U.S. Department of Energy,” the company said in a statement. “Employees should be proud of their continuous innovation and daily efforts to support customers.”
Abound is the third DOE-backed company to declare bankruptcy. The first was Solyndra last September. Beacon Power, an energy storage company, filed for bankruptcy protection the following month.
House Energy and Commerce Committee oversight subpanel Chairman Cliff Stearns, R-Fla., said June 28 that he wants to include Abound in a larger probe he is conducting of companies that failed after receiving DOE green-energy loan guarantees.