U.S. solar company Solyndra LLC. has filed papers declaring bankruptcy despite Obama administration announcing a half billion federal stimulus to the solar panel maker in an aim to decrease dependency on foreign shores. But things seem far from sorted as Solyndra has succumbed to Chinese rivals being the third solar power company in the last month to seek bankruptcy protection. Evergreen Solar Inc. followed by SpectraWatt Inc. were the two precedent companies who have thrown their hands in air in the last two weeks.
Last year, President Obama paid a visit to the company saying it achieved to hire 1,000 workers, produce solar panels over the lifetime of its expanded facility which was equivalent replacing eight coal-fired power plants. Obama had praised Solyndra’s progress stating it was leading towards a new brighter and prosperous future. Moreover, two years back Mr. Chu and Vice President Joseph F. Biden had announced a $535 million in federal loans to Solyndra in an act to boost renewable energy sources. Instead, Solyndra failed to compete with its overseas rivals cutting down jobs of more than 900 full-time employees. The company now has just, what it calls “core group” of 113 employees according to bankruptcy reports.
W.G. Stover Jr., CFO for Solyndra in a court filing said that rapid influx of solar products from foreign (Chinese) solar panel makers due to low-cost loans from state banks, cost them the bankruptcy. To stay in the competition, Solyndra was forced to reduce its average selling prices. Moreover, Europe’s attitude towards reducing or eliminating government subsidies and incentives to buy solar energy took a toll on the demand for their solar panels. To add to the grief, customers refused to honour payments as rivals offered extended payment terms.
Other than the loan guarantee from the Department of Energy, Solyndra also has some $1 billion in venture capital funds from investors including CMEA Ventures, Argonaut Ventures, Madrone Partners, Redpoint Ventures, RockPort Capital Partners, and U.S. Venture Partners.
Before its collapse, Solyndra had promised to produce 300 megawatts of solar panels. But now, questions are being raised on its bankruptcy despite loan guarantees since there are 40 similar companies in the same bracket that are vying for the stimulus program.