(Bloomberg News) President Barack Obama is standing by his support for renewableenergy after Solyndra Inc., a maker of solar panels that received a $535million U.S. loan guarantee, shut its doors, a White House spokesman said.
Solyndra suspendedoperations and plans to file for bankruptcy reorganization because it couldn'tcompete with larger rivals, the closely held company said in a statementyesterday.
Obama had touted Solyndraas part of the U.S. effort to aid development of alternative energy sources,and its failure was cited by Republican lawmakers who say the subsidies aremisguided. It's the third U.S. solar company to go under in a month, asplunging panel prices and weak global demand drive a wave of industryconsolidation.
"While we are disappointedby this particular outcome, we continue to believe the clean-energy jobs raceis one that America can, must and will win," White House spokesman Eric Schultzsaid today in an e-mailed statement. Obama visited the Fremont,California-based company in May 2010, and said the U.S. was in competition withChina and Germany for supremacy in renewable energy.
The Energy Department'sportfolio of dozens of other government-backed investments "continues toperform well and is on pace to create thousands of jobs."
Solyndra is likely to filefor Chapter 11 protection in Delaware on Sept. 7, as it evaluates optionsincluding selling itself or licensing its technology, David Miller, a spokesmanfor the Fremont, California-based company, said in an e-mail. About 1,100full-time and temporary employees have been dismissed. The company didn't sayhow much it owes creditors.
"Solyndra could not achieve full-scale operations rapidly enough to compete inthe near term with the resources of larger foreign manufacturers," the companysaid in the statement. Its problems were exacerbated by a global glut of solarpanels and slowing demand "that in part resulted from uncertainty ingovernmental incentive programs in Europe."
The company may havetrouble finding a buyer, said Adam Krop, an analyst at Ardour Capital Partnersin New York.
"I don't see anyoneswooping in," he said in an interview. "I don't see this technology as veryviable in the long-term. I see someone maybe buying the facility."
Solyndra producescylindrical panels that convert sunlight into electricity usingcopper-indium-gallium-diselenide thin- film technology. Standard solar panelsare flat.
"Manufacturing andassembly costs associated with a Solyndra module aren't particularly scalable,"Krop said.
The company has borrowed$527 million of the $535 million covered by the Energy Department loanguarantee, Damien LaVera, a department spokesman, said in an e-mail.
Solyndra plans to includethe Energy Department loan guarantee in its bankruptcy filing.
Solyndra's failure calls into question Obama's renewable energy policies,according to two Republican House members.
"It is clear that Solyndrawas a dubious investment," Representatives Fred Upton of Michigan and CliffStearns, of Florida, said in a joint statement yesterday. The company "is justthe latest casualty of the Obama administration's failed stimulus."
Investments in start-upcompanies inevitably involve some risk, Dan Leistikow, director of the EnergyDepartment's Office of Public Affairs, said in an article on the agency'swebsite. "The changing economics have affected a number of solar manufacturersin recent months, including unfortunately, Solyndra," he said. "We have alwaysrecognized that not every one of the innovative companies supported by ourloans and loan guarantees would succeed."
Representative Henry Waxman, a California Democrat, said the U.S. must continueto support renewable energy. Recent bankruptcies of U.S. solar companies are awarning and "we should be doing everything possible to ensure the United Statesdoes not cede the renewable energy market to China and other countries," hesaid in an e-mailed statement.
SpectraWatt Inc., a solarcompany backed by units of Intel Corp. and Goldman Sachs Group Inc., filed forbankruptcy protection Aug. 19, and Evergreen Solar Inc. did so Aug. 15.
SpectraWatt of HopewellJunction, New York, received a $150,000 grant in June 2010 from the NationalScience Foundation, and a grant of $500,000 in June 2009 from the EnergyDepartment's National Renewable Energy Laboratory.
Solyndra canceled in June2010 plans to raise as much as $300 million in an initial public offering.
Solyndra's backers includeArgonaut Private Equity, GKFF Investment, CMEA Ventures, Redpoint Ventures,Rockport Capital Partners LLC, US Venture Partners, Virgin Green Fund, and Artis Capital Management LP, accordingto the company's December 2009 IPO filing.