U.S. poised to hand over $197 million to another solar panel start-up
By Nichola Groom
LOS ANGELES (Reuters) - A tiny solar company named SoloPower will flip the switch on production at a U.S. factory Thursday, a major step toward allowing it to tap a $197 million government loan guarantee awarded under the same controversial program that supported failed panel maker Solyndra.
SoloPower has initiated a strategy to differentiate it from struggling commodity players in the solar panel industry. Still, there are several similarities between SoloPower and Solyndra - which became a lightning rod in the U.S. Presidential campaign this year after taking in more than $500 million in government loans and then filing for bankruptcy.
Like Solyndra, SoloPower is a Silicon Valley start-up and uses the same non-traditional raw material in its solar panels. And, like its now-defunct peer, SoloPower is one of just four U.S. panel manufacturers to clinch loan guarantees under the Department of Energy's $35 billion program to support emerging clean energy technologies. The DOE payments to SoloPower will come on top of the $56.5 million SoloPower has collected in loans, tax credits and incentives from the state of Oregon and the city of Portland, where its first factory will be located.
And, perhaps most importantly, SoloPower is entering the market at a time of cutthroat competition from cheaper solar products made in China.
Though global demand for photovoltaic solar installations is expected to grow about 8 percent this year, rapid expansion of panel manufacturing in Asia in recent years - combined with a pullback in government incentives in key European markets - has left a glut of solar panels in the market, sending prices down 30 percent this year alone.
Companies that make those panels are now struggling to survive. Even the world's largest solar panel maker, China's Suntech Power Holdings Inc, warned on Friday that it may be delisted by the New York Stock Exchange because its share price, which reached $90 in 2008, is now less than $1. Debt-heavy Suntech has also been hurt since it said in July that its partner in a solar development fund might have defrauded it with a bogus collateral pledge of hundreds of millions of German bonds.
These struggles have heaped political pressure on the sector. Republicans, intent on taking back the White House in November's election, are using Solyndra and other U.S. Department of Energy loan failures to brand the Obama administration's green incentives a waste of public money and fountain of cronyism. Solyndra, for instance, was backed by George Kaiser, a major fundraiser for Obama. Continued...