Solar firm halts work, files for bankruptcy
The company filed for Chapter 7 bankruptcy on July 2 in U.S. Bankruptcy Court, District of Delaware. Chapter 7 typically is used by companies that plan to cease operations and liquidate.
The shutdown affects Abound's 125 remaining employees. The workers were laid off "coincident with the filing, said Trent Waterhouse, an Abound spokesman. At one time Abound employed about 400 workers in the area.
Abound had been in discussions with potential buyers during the past several months, but ended negotiations when the involved parties were unable to come to an agreement on terms, the company said in a prepared statement. It blamed "aggressive pricing actions from Chinese solar-panel companies" that "made it very difficult for an early-stage start-up company like Abound to scale in current market conditions."
Abound supported recently imposed import tariffs, the statement said, "but this action is unfortunately too late for the company."
The company opened a 126,000-square-foot production facility in 2009 at 9586 I-25 East Frontage Road, south of Colorado Highway 119 near Firestone in Weld County. That facility has a Longmont mailing address. Abound has a long-term lease with Boulder-based owner W.W. Reynolds Cos., which bought the building for about $10 million in January 2010.
Abound also leases another 37,000-square-foot facility in Longmont, has administrative offices in Loveland, a research-and-development laboratory in Fort Collins and a European office in Munich, Germany.
The company was incorporated as AVA Solar in 2007 and rebranded as Abound Solar in 2009.
Abound's technology used a thin, cadmium-based material to convert sunlight into electricity instead of the silicon used in traditional solar panels. The roots of its thin-film cadmium solar modules can be traced to Colorado State University professor W.S. Sampath, whose research was supported by the National Renewable Energy Laboratory, according to the company.
In 2007, the DOE awarded the company a grant to support a pilot project to demonstrate the viability of its manufacturing process, according to the department. In December 2010, the department issued Abound a loan guarantee to help it build two commercial-scale plants — the one in Weld County and another in Tipton, Indiana. The plant in Indiana was scheduled to be operational by the end of 2014.
Abound had borrowed nearly $70 million of the $400 million federal guarantee, according to the DOE website, and by December 2011 had raised more than $300 million more in private equity financing from backers including BP Alternative Energy, the Invus Group, DCM and others.
"When the cost of polysilicon was high, Abound's technology offered the promise of a lower-cost alternative that would be built here in the United States," according to an article posted June 28 on the DOE's website by Damien LaVera, deputy director of the department's Office of Public Affairs. "When the floor fell out on the price of solar panels, Abound's product was no longer cost competitive. As a result, the company was unable to meet some of the financial milestones built into the loan agreement to protect the taxpayers and — in September 2011 — the department halted disbursements on the loan. Of the $400 million that Abound was originally approved for, the department only lent the company less than $70 million."
About 35 percent of the DOE's total loan portfolio is for solar-generating projects, which benefit from falling prices, LaVera wrote, while less than 4 percent was for solar manufacturers. LaVera's statement said the "steeper-than-expected collapse of pricing for solar modules … has been driven in part by what the Commerce Department has found to be unfair practices by competitors in China."
Once the Abound Solar bankruptcy liquidation is complete, LaVera wrote, the DOE expects the total loss to the taxpayer to be between 10 percent and 15 percent of the original loan amount.
In January, Abound had announced that it was teaming with a solar-system integration company in India, Solar Integration Systems India Private Limited (Solarsis), to commission a solar photovoltaic plant in Kadiri, Andhra Pradesh, India.
In February, Abound suspended production and laid off about 180 full-time workers and 100 temporary workers at its plant in Weld County, saying in a press statement that it needed time to retool the plant to produce a new line of more efficient solar panels and hoped to restart mass production by the end of 2012.
"Produced at lower scale and likely a higher cost, the chance for survival in the current market environment was always slim," wrote Shyam Mehta, a senior analyst at GTM Research, a branch of Greentech Media. "Unfortunately, Abound and other module manufacturing closures including thin film and (cadmium-telluride) suppliers alike, is still just the tip of the iceberg."
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