The Obama administration's green-energy loan program is under scrutiny as recipients of government loans seek bankruptcy protection. One such company is Abound Solar Inc. The alternative energy company isn't located here in Alabama. However, it may be of interest to taxpayers who stand to lose $40 million to $60 million on the loan after the company's assets are sold and the bankruptcy proceedings close.
The manufacturer was awarded a $400 million U.S. loan guarantee to build two factories where it would make thin-film solar panels using cadmium telluride. The company borrowed about $70 million against the guarantee, according to a representative from the Energy Department.
Experts say that aggressive pricing from Chinese solar-panel companies has made it difficult for startup companies like Abound to make it. An analyst at Bloomberg New Energy Finance commented that the bankruptcy is not a surprise saying, "They were trying to sell to a competitive, over-supplied market with limited production. That keeps costs high."
Close to $35 billion in loan, loan guarantees and conditional commitments has been provided to renewable-energy companies by the Energy Department. About 35 percent of the funds are for solar-generating projects, which would benefit from the falling prices of solar panels. About 4 percent are solar manufacturers, which are hurt by the falling prices.
"When the floor fell out on the price of solar panels, Abound's product was not longer cost competitive," said an Energy Department spokesman. The bankruptcy follows that of Solyndra, LLC, a solar panel manufacturer that shut down last August after receiving a $535 million loan guarantee from the same U.S. Energy Department program.
Source: BloombergBusinessweek, "Abound Solar to Suspend Operations, Will Seek Bankruptcy," Christopher Martin and Jim Snyder, June 28, 2012