With Solyndra Bankruptcy, Domestic PV Production Takes Another Hit

Solyndra is the second U.S. solar panel manufacturer to file for bankruptcy in a matter of weeks, following on Evergreen Solar’s filing earlier in the same month (see “Evergreen Solar Files for Bankruptcy,” EBN Aug. 2011). Solyndra, based in California, offered a unique technology—panels made up of glass tubes filled with copper indium gallium diselenide (CIGS) thin-film designed to capture more light in low-light conditions.

The six-year-old company filed for bankruptcy on August 31, 2011, laying off 1,100 employees and sparking a flurry of controversy and accusations of favoritism by the Obama administration surrounding a half-billion-dollar, government-backed loan received by Solyndra in 2009. While the Government Accountability Office has suggested that the U.S. Department of Energy (DOE) has treated companies vying for government-backed energy loans inconsistently, accusations of favoritism have not been substantiated. The House Committee on Energy and Commerce has an ongoing investigation into the way that DOE administered the loan guarantee program.

As with Evergreen and other domestic solar manufacturers, the likely cause of Solyndra’s collapse is the changing economics of the solar market. Even at the time of the company’s launch, analysts questioned whether the tube technology’s purported efficiency advantages could make up for its higher manufacturing cost. Since then, foreign manufacturers, largely based in China, have driven the cost of solar panels down, while a stumbling global economy has reduced demand. Solyndra’s unique technology offered little advantage in a market flooded with cheaper panels from overseas.

Solyndra’s bankruptcy casts a dark shadow on other domestic solar panel manufacturers, raising questions about the industry’s future. The companies’ failure caught many off guard, including employees, who reportedly arrived at work to find the plant shut down. Unless demand picks up soon, other U.S. manufacturers may face a similar fate.