Solyndra LLC, a Fremont, Calif.-based manufacturer of solar panels that President Barack Obama held up as an example of the kind of green technology venture that would help America stay competitive in the global economy, suddenly closed on Wednesday. The company announced it would file for bankruptcy due to crushing competition from overseas rivals and global economic conditions. All 1,100 of Solyndra’s workers were laid off immediately without severance packages.
"Regulatory and policy uncertainties in recent months created significant near-term excess supply and price erosion," Solyndra's President and Chief Executive Officer Brian Harrison said in a statement, CBS News reports.
Solyndra was the first company to receive a loan guarantee from the U.S. Department of Energy under an advanced clean energy program created in 2005, Reuters reports. The company received a $535 million loan guarantee from DOE in 2009, the San Jose Mercury News reports, and also lined up $1.1 billion in private venture capital funding.
According to the San Jose Mercury News:
Although Solyndra was buttressed by VC and federal money, the company struggled. Among the challenges that doomed Solyndra: Low-cost Chinese manufacturers backed by large subsidies from the government are building massive factories that have rapidly driven down the price of solar panels and shifted more than 50 percent of production to China.
Yet analysts also noted that Solyndra had failed to curb its manufacturing costs. Industry watchers pointed out that Solyndra's solar tubes were still about two or three times as expensive as the standard costs for solar manufacturers in the United States.
In May 2010, Obama visited the company's Fremont, Calif., factory. "Companies like Solyndra are leading the way toward a brighter and more prosperous future," he said in a speech there.
"We have always recognized that not every one of the innovative companies supported by our loans and loan guarantees would succeed," Dan Leistikow, a spokesman for the Department of Energy, told the San Jose Mercury News. "But we can't stop investing in game-changing technologies that are key to America's leadership in the global economy."
The Solyndra bankruptcy announcement is the third from a U.S. solar maker in the last month, Reuters reports. Evergreen Solar Inc. filed for Chapter 11 two weeks ago, followed four days later by Intel Corp.-backed SpectraWatt Inc.