DENVER–Another green-energy company receiving millions in federal stimulus funding has collapsed, this one in Colorado.
Abound Solar, which manufactures solar panels, announced Thursday that it would declare bankruptcy next week and suspend its operations. Based in Loveland, Abound has 125 employees who now face layoffs.
The company had spent $70 million of the $400 million in loan guarantees from the Energy Department for the construction of solar panel manufacturing lines in Colorado.
The department froze the remainder of the funds in August after determining that “challenging market conditions in the solar industry did not merit additional funding risk,” according to a statement by Abound.
Abound is the third renewable-energy company to seek bankruptcy protection after receiving funding through the Obama administration’s economic stimulus plan. Both Solyndra, a California maker of solar panels, and Beacon Power, a Massachusetts energy-storage company, declared bankruptcy in 2011.
Solyndra received $528 million in federal loans while Beacon won $43 million in loan guarantees.
Damien LaVera, a spokesman for the Energy Department, acknowledged in a statement Thursday that “not every company, nor every investment, will be a success–but America will be stronger and more competitive if we continue to support and build a thriving solar industry here at home.”
“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,” said Energy Department spokesman Damien LaVera in a Thursday press release.
Republicans have criticized the administration for “picking winners” in the energy sector by sinking millions in taxpayer dollars on solar, wind and other renewables, while making it more expensive for fossil-fuel companies to compete by ramping up regulations.
“Our government is not good at picking winners and losers in the marketplace but has certainly proved it is good at wasting taxpayer dollars,” said Congressman Jim Jordan, the Ohio Republican who chairs the House Government Reform and Oversight Committee’s subcommittee on regulatory affairs, stimulus oversight and government spending, told the Associated Press Thursday.
Abound had also raised $300 million in private equity financing, but struggled as China flooded the market with inexpensive competitors, causing the price to plummet by 50% in the last year. LaVera said that China offered $30 billion in government-backed loans to its solar industry in 2010 alone.
“That’s because China realizes this is a huge global market and a competition worth winning,” said LaVera.
Abound had been engaged in discussions with potential buyers for several months, but the company was unable to reach an agreement.
“Abound supports recent initiatives to enforce fair trade with import tariffs, but this action is unfortunately too late for the company,” said Abound in a statement.
The company also thanked its investors, including the Energy Department, for their support.
“Abound is appreciative of the significant investment from private investors and the U.S. Department of Energy,” said Abound in the statement. “Abound believes that competitive solar energy remains important to U.S. energy security and job creation; and that longer term, consistent renewable energy policy is critical to encourage further private investment in this sector.”
The company, which produced panels that made electricity directly from sunlight using a process called cadmium telluride, also had a manufacturing plant in Indiana.