SoloPower, a Silicon Valley solar startup, will initiate production at a U.S. factory on Thursday with a view toward making use of a government loan guarantee worth $197 million. The loan will be awarded under the same program that supported Solyndra.
SoloPower’s strategy differentiates it from various struggling figures within the solar panel industry, but there are striking similarities. Solyndra, of course, took in more than $500 million in government loans and then filed for bankruptcy. SoloPower uses the same non-traditional raw material in its panels as did Solyndra, and, like that company, SoloPower is now one of just four American panel makers to secure loan guarantees from the Department of Energy under its $35 billion program to support emergent renewables companies.
These DOE payments to SoloPower are on top of $56.6 million it has already secured in loans, tax credits, and other incentives from the state of Oregon and the city of Portland, where its first factory will be located. Most worryingly, SoloPower hopes to achieve success when Chinese solar manufacturers have all but secured the international market.
Demand for PV solar installations is expected to increase by about 8 percent this year, but the rapid growth of panel production in Asia plus lowered European government incentives means there are just too many solar panel makers in the market. Prices are down 30 percent this year alone.
China’s Suntech Power Holdings (NYSE: STP), the world’s biggest solar panel maker, issued a warning on Friday saying it may be delisted by the NYSE as its share price ($90 in 2008) is now less than $1. That’s a pretty big change.
Naturally, such a political and economic climate makes for easy pickings by renewable opponents, who miss no opportunity to ‘prove’ that economic support for renewables is an expense the nation cannot afford right now.
SoloPower would like to differ, claiming that the company’s focus on commercial and industrial rooftops is a key differentiating factor. SoloPower Chief Executive Tim Harris also commented that the company now commands a price premium in an increasingly commoditized market.
It appears that the company views Japan, Italy, and Korea among its top potential markets. In any event, the company has raised more than $200 million thus far in venture capital from investors that include Hudson Clean Energy Partners, Convexa Capital Ventures, and Firsthand Capital Management.
The company must have its first production line in motion and meet some other milestones before it can use DOE loan funds. The Portland, Oregon factory will produce 400 MW of solar panels annually and employ around 400 people once it is complete.
Although “thin film” solar technology, an alternative to silicon, is no longer a necessity in the solar market, SoloPower claims that it already has more orders than it can fill right away.
SoloPower uses copper indium gallium selenide (CIGS) as its raw material for the panels – the same material used by Solyndra. CIGS is precisely the technology that has become swamped by Asian manufacturers with their concomitant price advantages. By contrast, First Solar (NASDAQ: FSLR) – one of the few profitable solar companies – relies on cadmium telluride, a heavier material.