The demise of yet another thin film solar maker

The lights are apparently out for yet another thin film solar startup. Global Solar Energy, which was building a business around flexible solar panels, is laying off nearly all of its employees and stopping its manufacturing operation, according to Inside Tucson Business.

The Arizona-based company developed ultra-thin solar panels using the materials copper, indium, gallium and selenium (CIGS) to convert sunlight into electricity. Venture-backed Global Solar initially sold strings of CIGS solar cells to companies that would then assemble those strings into panels. Around 2009, the company said it would focus on making flexible solar panels that forgo the use of glass as a protective cover.

Flexible panels could be a good fit for roofs that can’t bear heavy weight, or they could be shaped to resemble – or become embedded in — roofing materials. But foregoing the use of glass meant Global Solar had to find another way to protect the CIGS from its chief enemy: moisture. Companies such as 3M in recent years have rolled out protective films for moisture-sensitive solar cells, but those encapsulants tend to be expensive. A Global Solar executive told me last year that the company had found a good barrier film for its CIGS cells,  though he declined to divulge its cost or maker.

Global Solar Takes World's Largest CIGS Project LiveGlobal Solar’s star seemed to be rising when it started to work with Dow Chemical to create roofing shingles with its CIGS cells inside. Partnering with a large company meant Global Solar could lean on Dow to help promote its technology. But Dow delayed the launch of roofing shingles, especially given the home construction market was in poor health following the mortgage crisis. Dow finally launched the solar shingle product about a year ago in Colorado. It then began selling them in California and Texas earlier this year.

Global Solar had factories in Tucson and Germany. By Arizona law the company had to notify the state when it was planning any meaningful layoffs. It filed a notice in July about letting go nearly 40 employees. A Global Solar employee told Inside Tucson Business that the company was laying off about 95.

Global Solar appears to be a casualty of an imbalance of supply and demand that has persisted for two years and knocked out dozens of solar manufacturers worldwide. Major solar panel makers, including Suntech Power (s STP), First Solar (s FSLR) and SunPower (s SPWRA), all have shuttered production lines and posted losses as a result. Suntech recently announced its plan to scale back production and lay off about 50 employees at its Arizona factory.

Startups have had a harder time toughening it out because they typically lack the financial strength of their larger rivals. Most often times they need to be in an expansion mode – to build factories and line up customers – in order to move technology out of the labs and into the marketplace. Doing so when the market is experiencing a glut of solar panels simply lowers the startups’ survival rates. Solyndra, which also made CIGS solar panels, suffered a high-profile death last year when it was ramping up production and realizing it couldn’t compete against companies that were able to sell solar panels far more cheaply.