* 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 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
"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
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)