Chinese competition sank govt-backed Abound Solar-executives

Wed Jul 18, 2012 8:28pm IST

Related Topics

A statue of Ganesh, the deity of prosperity, is carried in a taxi to a place of worship on the first day of the ten-day-long Ganesh Chaturthi festival in Mumbai August 29, 2014. REUTERS/Danish Siddiqui

Ganesh Chaturthi Festival

During Ganesh Chaturthi idols will be taken through the streets in a procession accompanied by dancing and singing, and will be immersed in a river or the sea in accordance with Hindu faith.  Slideshow 

* Price of solar panels fell as Chinese cos flooded market

* Government stopped funding Abound's loan in August 2011

* DOE officials, past and present, defend loan program

By Ayesha Rascoe

WASHINGTON, July 18 (Reuters) - Abound Solar was doomed by Chinese subsidies that helped flood the market with solar panels, former company executives said on Wednesday as Republicans delved into the latest failure of a government-backed solar panel manufacturer.

The collapse of Abound and the high-profile bankruptcy of Solyndra, another solar panel maker that also received a government loan guarantee, have provided rich fodder for Republicans on the campaign trail attacking the Obama administration's energy policies.

Abound Solar filed for bankruptcy earlier this month, succumbing to intense competition from China that has sharply driven down the cost of solar panels, said Thomas Tiller, who served as Abound's chairman.

Tiller said the Chinese government provided about $35 billion in subsidies to Chinese solar companies, resulting in sharp growth in production capacity that outpaced demand and pushed down the price for panels by more than 50 percent in just a year.

"Such a severe market change made it difficult for Abound and others to survive," he said in remarks prepared for a House of Representatives oversight committee hearing.

Prior to filing for bankruptcy, Abound received about $70 million of a $400 million loan guaranteed by the U.S. Energy Department.

The drop in the solar panel price was bigger than the Energy Department and other experts expected at the time the Abound loan was finalized, David Frantz, acting executive director of the department's loan program, said in prepared testimony.

The decline in polysilicon costs made Abound's cadmium telluride thin-film panels unprofitable, Frantz said. To protect taxpayers, the department stopped its funding in August 2011 when Abound began missing agreed financial milestones.

DEFENDING LOAN PROGRAM

Jonathan Silver, the venture capitalist tapped to ramp up the Energy Department's loan guarantee program, staunchly defended the Obama administration's record.

"The funds represented by investments that have failed represent less than 3 percent of the total portfolio," Silver said in written testimony for the House committee hearing.

"This is a record the private sector would consider remarkable, but is particularly impressive for a portfolio of technologically innovative projects being built at commercial scale for the first time anywhere," said Silver, who is now a visiting fellow at the Third Way think tank.

Silver left the Energy Department last October after the loan guarantee program doled out the last of its funding from the stimulus act of 2009, and as Republicans stepped up their probe into the failure of Solyndra, which received $500 million in federal funding.

Silver joined the department after the Solyndra guarantee was awarded, but he was in charge when the government agreed to restructure the debt as the company ran out of cash.

Frantz also strongly defended the administration's management of the loan program.

"The troubles of some segments in the solar manufacturing market should not overshadow the great work that the department's loan programs have done to date, or the need to continue to find ways to support clean energy deployment in this country," Frantz said. (Editing by John Wallace)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Market Eye

REUTERS SHOWCASE

HSBC PMI

HSBC PMI

Factory activity expands at slower clip in August.  Full Article 

Modi in Japan

Modi in Japan

Japan aims to double India investment in 5 years - Nikkei  Full Article 

Market Outlook

Market Outlook

Indian shares headed for correction, but outlook strong - BofA Merrill.  Full Article 

India Infrastructure

India Infrastructure

RBI rule handicaps India's infrastructure hopes  Full Article 

Book Talk

Book Talk

Reema Abbasi and a glimpse of Pakistan’s Hindu past  Full Article 

China Economy

China Economy

Retreat in China's PMIs heightens calls for policy easing.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage