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Solar Manufacturer Solyndra Files for Bankruptcy
Solar startup Solyndra has just shut down, announcing their intention to file for Chapter 11 bankruptcy and immediately let go of most of their 1000 employees. The news comes as a considerable shock, particularly considering how, just two years ago, Solyndra was the talk of the solar world. Not only did the company successfully secure a $535 million loan guarantee from the government, but they opened a massive $700 million dollar plant in Fremont, California. Solyndra blames the failure on the unpredictable market and oversupply that kept solar prices low, but the financial realities of the company, and its unusual solar electric tube technology adopted in the industry, are sure come under scrutiny. The news is also sure to refresh the political discourse surrounding green jobs.
Solyndra was unique in their ability to aggressively raise capital for their operations. The company managed to raise over $1.5 billion for their proprietary “plug and play” solar technology, which needed much less structural implementation, in turn reducing overall costs. Their key technology featured tubes lined with thin film solar cells that would be set into racks and placed on flat roofs.The panels needed no extra bracing for wind loads, and on a white roof they collect sun from all angles improving the overall efficiency. President Obama made a speech in 2010 touting the ingenuity of the company.
The closing of their operations is a real black eye for green manufacturing in the US, and has exposed the extraordinary financial risk that comes when markets are overextended and government support is inconsistent. But it is worth noting that Solyndra is not without fault as the company jumped head first with a new technology, rather than developing the market for their product.
The ripple effect for other green tech companies may be hard to project at the moment, but the fail could potentially harm the capacity of companies to raise cash — especially if investors are already wary of the green tech sector. Political fallout over the government’s support of green jobs is sure to hit the echo chamber as well.
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