Abound Solar suspends production, lays off 180

The past year has been difficult for solar panel makers as many of them have shuttered factories and filed for bankruptcies. The latest sign of this bleak time comes from a Tuesday afternoon announcement by Abound Solar, which snagged a $400 million federal loan guarantee to build solar panel factories but is now suspending production and letting go about 180 full-time workers.

The Colorado startup, which makes cadmium-telluride solar panels, said it needs time to switch production equipment to produce a new line of better performing solar panels. The plan is to restart mass production by the end of this year, the company said.

The company’s marketing communications manager, Becky Ellzey, told me last month that the company had about 400 employees worldwide. That means the company is cutting its staff by 45 percent. A local paper in Colorado, the Times Call, reported that Abound is letting go an additional 100 temporary workers. An overall cut of 280 jobs means a 70 percent reduction of its workforce.

A successful manufacturing operation shouldn’t stop running the lines all together in order to switch to new equipment. Abound conceded this point somewhat when it noted in its press release that the “current market conditions are challenging for all U.S. solar manufacturers,” and that it needs to focus its “sources to accelerate scale-up of our next generation high efficiency technology.” In other words, the company now has to move faster than it previously planned to hopefully roll out a more attractive product.

So how does this hiccup impact the company’s plan to use a $400 million federal loan to add 775 MW of production lines in its existing Colorado factory and at a new, yet to be completed plant in Indiana by the end of 2014? The company hasn’t returned our inquiry to get an update about the expansion plan, but it’s doubtful that it can hit some of its previously stated milestones. Abound has drawn down only $70 million of the $400 million loan, said a spokesman for the U.S. Department of Energy, which approved a loan guarantee that made the loan from the Federal Financing Bank possible.

The DOE has tightened its oversight on loan or loan guarantee recipients ever since Solyndra went bankrupt last year after using most of a $535 million federal loan to build a solar panel factory in California. The government now emphasizes the rules that are in place to dole out payments only if companies meet milestones and show results. Still, it doesn’t look good any time a DOE-supported company stumbles.

Abound Solar isn’t alone. An energy storage company, Beacon Power, filed for bankruptcy and found a buyer earlier this month. Electric carmaker Fisker Automotive missed production and sales goals for its government loan and announced it had to suspend the development of a second model.

Abound announced its production suspension plan during the week when the DOE is holding a conference to highlight the work of companies it has supported. The conference featured Bill Gates, who bemoaned the lack of adequate funding for energy research by the government in a speech today.

Photo courtesy of Abound Solar