Another government-backed solar energy company has decided to turn out the lights while still owing tens of millions of dollars to U.S. taxpayers.
Abound Solar Inc., based in Colorado, received a $400 million federal loan guarantee, and borrowed about $70 million of that amount. It now plans to file for bankruptcy and close, according to the Department of Energy, which awarded the loan.
The Energy Department blamed the collapse on the fast-falling prices of solar panels, a factor government officials also cited about a year ago when another loan recipient, Solyndra LLC, shuttered while still owing more than $500 million to the federal government.
Another energy company backed by an Energy Department loan, Massachusetts-based Beacon Power LLC, also has filed for bankruptcy.
Energy Department spokesman Damien LaVera said in a statement Thursday that Abound Solar would close its doors and file for bankruptcy next week.
“When the floor fell out on the price of solar panels, Abound’s product was no longer cost competitive,” he said.
“As a result, the company was unable to meet some of its financial milestones built into the loan agreement to protect taxpayers, and in September 2011 the department halted disbursements on the loan.”
Mr. LaVera said the company had bipartisan support in Congress and had “raised more than $300 million in private equity financing. Its backers included large and established energy investors - including BP Alternative Energy, the Invus Group, DCM and others.”
Abound Solar confirmed the news hours after the Energy Department announcement, saying talks with potential buyers in recent months fell through. Officials blamed “aggressive pricing actions from Chinese solar panel companies” that made it hard for the company to thrive.
Abound also was offered nearly $12 million in tax credits and another quarter-million dollars in training grants, the Indiana Economic Development Corp. announced in 2010.
“While disappointing, this outcome reflects the basic fact that investing in innovative companies, as Congress intended the department to do when it established the program, carries some risk,” Mr. LaVera said.
Late Thursday afternoon, Abound’s website posted a news release acknowledging that the company intended to file a petition for protection under U.S. Bankruptcy Code in Delaware next week. It said a suspension of operations would affect approximately 125 employees.
News of the company’s demise prompted early criticism from Rep. Jim Jordan, Ohio Republican and chairman of the House subcommittee on regulatory affairs, stimulus oversight and government spending.
In a statement, Mr. Jordan, among other Republicans, said Abound’s collapse shows that “our government is not good at picking winners and losers in the marketplace but has certainly proved it is good at wasting taxpayer dollars.”
Meanwhile, thought it has faded from the headlines, Solyndra’s bankruptcy case remains active in Delaware.
According to a recent filing, attorneys for the company had interactions as recently as April with the U.S. Attorney’s Office in San Francisco, which is overseeing a criminal investigation into the California-based company.