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The announcement may not be a big surprise. Abound originally was approved for up to $400 million in loan guarantees to support construction of two manufacturing facilities in 2010, but when solar panel prices fell and Abound was no longer able to compete the DOE exercised one of its failsafes in the loan program and stopped the disbursements to the company in September 2011.
The company built one plant in Longmont, Colorado, but never started the second. In a statement also released Thursday, Abound Solar said "Abound believes that, at scale, its USA-made CdTe panel technology has the ability to achieve lower cost per watt than competing crystalline silicon technology made in China. However, aggressive pricing actions from Chinese solar panel companies have made it very difficult for an early stage startup company like Abound to scale in current market conditions."
The statement also said Abound had been in negotiations with potential buyers for several months but "ended negotiations when the involved parties were unable to come to an agreement on terms." 1 DOE's announcement came in the form of a blog post that stressed the importance of maintaining a strong solar industry in the U.S. and the jobs it has brought. The post also spent a good bit of time defending its reasons for granting the loan guarantee to Abound.
It's evident that DOE was trying to put as much positive spin on the story as possible and clean up as much of the mess as it could in advance of what agency officials must have expected would be a wave of criticism. DOE can hardly be blamed for the effort – particularly in light of the beating it took over the Solyndra bankruptcy in September of last year.
The agency also said that about 35% of its loan portfolio was for solar generation projects which gain from lower solar panel prices, and about 4% for solar manufacturers which are suffering worldwide from the faster than anticipated drop in solar module prices.
And DOE noted that taxpayers are not on the hook for the entire amount of the loss Abound represents. The announcement said "Because of the strong protections we put in place for taxpayers, the Department has already protected more than 80% of the original loan amount. Once the bankruptcy liquidation is complete, the Department expects the total loss to the taxpayer to be between 10 and 15 percent of the original loan amount.
While disappointing, this outcome reflects the basic fact that investing in innovative companies – as Congress intended the Department to do when it established the program – carries some risk."
Abound Solar is the third company in the DOE loan program to go under. A month after Solyndra filed for bankruptcy, energy storage company Beacon Power filed. The company had received $43 million in Recovery Act loan guarantees.
We have asked before if it's time to rethink the loan guarantees. Please use the Talk Back form below to share your thoughts on this latest development. 1 You might also be interested in ...
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