Toledo-area solar firms shining bright through some dim spots in market

The Toledo firm faced setbacks, including dozens of layoffs, this year when an Italian customer delayed receipt of a large order of solar panels. Since then, Mr. Deng said, his small business has slowly climbed back, securing new customers and considering a partnership with another solar firm that could lead Xunlight to expand its production beyond traditional solar panels.

Mr. Deng said Xunlight’s retooled strategy could make the company stronger.
“The industry has changed and is changing, and we have to constantly rethink and constantly look for various opportunities to broaden our product line and attract new customers,” he said.

Although solar experts say the domestic market for photovoltaic panels is growing, Toledo-area solar firms are working to overcome hurdles at the state, federal, and global levels. Companies such as Xunlight, First Solar Inc., which has its only U.S. manufacturing plant in northwest Ohio, and Willard & Kelsey Solar Group LLC of Perrysburg face an economic downturn, numerous competitors worldwide, and the potential end of renewable-energy policies and subsidies that help drive panel sales.

Can the local operations withstand the pressures?

Rick Stansley, director of strategic business development at the University of Toledo, said each of the local solar companies has the wherewithal to do so.

“All in all, I would say that we are doing relatively well with respect to our business enterprises,” he said.

Among the issues facing local solar companies is a proposed repeal of Ohio’s Alternative Energy Portfolio Standard, which requires 25 percent of electricity sold in the state to be produced from alternative resources by 2025. Further, a loan guarantee program from the U.S. Department of Energy that helps companies gain financing for advanced energy projects is to expire at the end of this month.

The debate of the federal loan guarantee program has been heightened by the collapse of Solyndra Inc., a California solar panel manufacturer. The company received $535 million in federal-loan guarantees before filing for bankruptcy this month, and Solyndra faces a Justice Department investigation and a congressional probe.

Solyndra’s downfall has led some lawmakers to contest federal aid for other solar manufacturers. U.S. Rep. Darrell Issa (D., Calif.) argued last week that loans to solar panel makers are poor bets, and that foreign competition and other pressures could lead to the “collapse of the solar panel manufacturing business in America.”

But Thomas Kimbis, general counsel for the Solar Energy Industries Association in Washington, contends that the most financially fit and strategically oriented firms stand to benefit as the United States becomes one of the world’s fastest-growing solar market.

“The competition in the market is so fierce that only the strongest companies are going to survive, especially in economically poor conditions and with policy uncertainty,” said Mr. Kimbis, who is also vice president of strategy and external affairs for the trade association.

GOP Probes Now-Bankrupt Solar Company That Obama Once Touted

House Republicans are eager to find out at a congressional hearing Wednesday why President Obama and his administration continued to promote and refinance $528 million in stimulus loan guarantees to the now-bankrupt solar panel maker Solyndra even after warning signs emerged.

“Many of us think he was trying to get the money out the door perhaps for political reasons, and in the end taxpayers lost over half a billion dollars,” said Rep. Cliff Stearns, R-Fla., chairman of the House Energy and Commerce Subcommittee on Oversight and Investigations, whose hearing is part of a seven-month investigation.

Asked if someone should be fired over this, Stearns told Fox News, "I do."

But the White House has defended the federal loan.

"This loan guarantee was pursued by both the Bush and Obama administrations," White House spokesman Eric Schultz said. "The Department of Energy's overall portfolio of investments -- which includes dozens of other companies, continues to perform well and is on pace to create thousands of jobs."

In an SEC filing in March 2010, a year after the California-based Solyndra got the loan guarantees but before the refinancing, independent auditor PricewaterhouseCoopers said several negative financial factors “raise substantial doubt about its ability to continue as a going concern.”

Still, two months later, Obama went to Solyndra’s solar panel plant and touted green energy and the stimulus.

“The true engine of economic growth will always be companies like Solyndra,” Obama said at the time.

But this summer, after CEO Brian Harrison told members of Congress that “Solyndra’s financial condition was improving," Energy Department officials let lawmakers know that the company was facing “decreased revenues.”

“Obviously there was duplicity here because (the Energy Department) was on the board of Solyndra monitoring what happens, and eventually they were concerned enough that they sent in their own inspector team and the FBI a couple of days ago because they suspect criminality,” Stearns said.

In addition to raiding the company's headquarters, the FBI also interviewed Solyndra executives at their home following the company's bankruptcy announcement. The FBI has not said what the investigation is focused on but it is widely believed to be linked to the bankruptcy.

"While we are disappointed by this particular outcome, we continue to believe the clean energy jobs race is one that American can, must and will win," White House spokesman Schultz said. "The question we, as a country, have to ask ourselves is: are the jobs of the future going to created here in the United States or elsewhere?"

Solyndra, whose technology relied on a tube that could soak up sunlight from many different angles, producing energy more efficiently and using less space, became the first company to get a loan guarantee through Obama’s 2009 economic stimulus program. The government later restructured the terms of the loan.

When the Energy Department rejected Solyndra’s request for a second refinancing to get additional financing from private investors, the company filed for bankruptcy.

Solyndra Bankruptcy Reveals Dark Clouds in Solar Power Industry

Many of the problems that forced solar company Solyndra to shutter operations threaten other businesses in the sun-power industry, with more upheaval likely in the coming months, analysts say.

The bankruptcy last month of Fremont, Calif.-based Solyndra comes as solar manufacturing undergoes a major transition. Prices of solar panels have plummeted, causing a supply glut and slicing company revenues.

Solyndra's collapse marked the third time in as many weeks that a solar company declared bankruptcy. Evergreen Solar Inc. of Massachusetts and SpectraWatt of New York also filed for protection.

"It coincides with the fact that the industry is in trouble," said Ken Zweibel, director of the Solar Institute at George Washington University. "There is a crisis in the solar manufacturing world there's no question about it. With three companies declaring bankruptcy in three weeks, there's no question that they're all under pressure."

Solyndra's bankruptcy also comes as Congress battles over spending and the best way to create jobs. Solyndra had received $527 million in federal loans authorized by a program in the 2009 stimulus act. Many in the GOP say that President Obama's bid to create "green jobs" has been a failure. That could make it hard for solar to fight for any new federal help.

States like California are adding new incentives, however, which the industry hopes will keep it healthy.

The solar industry's trade group, meanwhile, has urged people not to see Solyndra's bankruptcy as a sign of trouble for the sector.

"What we are seeing in solar happens in every industry that is maturing and growing more competitive," said Rhone Resch, president and CEO of the Solar Energy Industries Association. "You're going to see winners emerge who find innovative ways to offer consumers the most competitively priced products."

Solyndra had some unique problems, analysts said, that helped accelerate its demise. The company made a unique product: cylindrical solar tubes equipped with copper indium gallium diselenide thin-film technology.

The cylinders could "capture sunlight across a 360-degree photovoltaic surface," Solyndra said on its website. Designed for commercial rooftops, the product offered "the fastest and easiest installation, a non-penetrating mounting system, and superior wind, snow and soiling performance," Solyndra said.

But the tubes also had limited uses, analysts say.

"It was a specialty product that could be used in certain applications, that would be very attractive for those applications, but wouldn't be generally useful for large fields or even [all] rooftops," Zweibel said. "They have misunderstood the marketplace."

That made Solyndra different. But it also had something in common with other solar manufacturers. The Chinese government is investing in solar production, which has led to a burst in production that has boosted supplies and forced down product prices worldwide.

The price of panels has tumbled more than 40 percent in a year, Zweibel said, a drop that followed price declines in 2009.

Analysts believe companies beyond Solyndra will face tough financial decisions.

"There's a lot of turmoil in the solar industry," said Joshua Linn, a fellow at Resources for the Future, "a lot of new companies starting and a lot of companies going out of business around the world. There's going to be a lot of uncertainty."