On February 28, a PV firm that received a DOE loan guarantee announced it would halt production of it’s first generation thin-film modules in order to focus resources on a new product.
The Colorado-based Abound Solar manufactures cadmium telluride thin-film PV modules for commercial and utility scale installations. The current modules convert 10.5 percent of available sunlight to electricity, but the recently approved second generation modules have an efficiency of 12.5 percent.
Abound says it is stopping production of the original product in order to “accelerate the manufacturing process and equipment changes needed” for the new product.
The company had a $400 million loan guarantee from the DOE through the same program that provided Solyndra’s loan guarantee. Abound has only taken out $70 million in loans under the guarantee.
The halt in production will “temporarily” eliminate 180 full-time positions at Abound’s Colorado facility, which opened in 2009. The Longmont Times-Call reports that the company also fired 100 temporary workers. Originally with about 400 employees, these cuts have reduced the company’s staff by 70 percent.
Abound says it anticipates that once the next phase has begun, many of these jobs will return. The company expects to achieve mass production of the new product by the end of 2012.
“While this is a difficult move with regards to temporarily reducing our workforce, we know that accelerating the introduction of our next generation module will bring significant benefits to our customers and allow us to create even more jobs in the future,” said Craig Witsoe, president and CEO of Abound Solar.
When the loan guarantee was finalized, Abound had projected it would create 1,200 jobs total in Indiana and Colorado, as well as another 1,600 supply chain jobs around the country. The company says their plans to build a facility in Tipton, Indiana still stands, but it is unclear when that will occur.
The firm is but another victim of Chinese competitors’ low prices. “Abound is facing the same headwinds — cheap crystalline silicon from China — that made Solyndra a political football,” Pavel Molchanov, an analyst at Raymond James & Associates Inc., told Bloomberg.
“I think they made the right decision to conserve cash and focus on improving efficiency so they can ramp up when they’re ready,” Molchanov continued.
“The way the solar market is today, everything everyone is making they’re selling below cost,” Steve Abely, Abound’s chief financial officer, told the Wall Street Journal. “Not just small guys like us—substantial Chinese manufacturers are selling below cost. They can’t do it for a sustainable period, and we can’t either.”
A division of the DOE found that Chinese PV firms are actually at a cost disadvantage compared to U.S. firms, supporting the view that the Chinese government provides illegal subsidies. This Friday, the Commerce Department is due to announce whether Chinese PV products will be hit with import duties.
Witsoe, though, is confident that this change in strategy will allow Abound Solar to not only survive but also prosper. “By focusing our resources to accelerate scale-up of our next generation high efficiency technology, we will sustainably lower total system costs for our customers, increase our own profitability and grow U.S. jobs and energy security,” he said.
Continued DOE Support
This news comes in the midst of the Congressional investigation into Solyndra’s DOE loan guarantee, and Republicans will likely paint Abound’s case as another failed government attempt to “pick winners and losers” in energy innovation. But the administration says it still supports Abound Solar, despite the change of plan.
“While the challenges facing solar manufacturers have been widely reported, we continue to believe that supporting innovative companies like this is important to ensuring our nation has the ability to compete for the clean energy jobs of tomorrow,” said Damien LaVera, an Energy Department spokesman.