In a blow to the Obama administration's efforts to create green jobs, solar-cell maker Solyndra announced today that it would close its Fremont factory, lay off its 1,100 employees and file for bankruptcy.
Solyndra was the first company to win one of the guarantees, receiving $535 million in 2009 to build its second factory in Fremont. Congressional critics of the loan program were livid. A U.S. House panel in July started investigating how Solyndra won approval for the loan guarantees.
The panel already subpoenaed records about the Solyndra loan from the U.S. Department of Energy.
The bankruptcy serves as another stark reminder of the fierce headwinds facing America's solar industry.
The United States once dominated solar manufacturing. Two other U.S. solar companies, Evergreen Solar and SpectraWatt, filed for bankruptcy protection in August.
Solyndra had recently completed construction of a new solar equipment factory that was built and equipped with funds from the federal loan. Solyndra intends to file a Chapter 11 bankruptcy in a federal court in Delaware next week, said Dave Miller, a company spokesman.
President Barack Obama touted Solyndra as a poster child for clean energy after the company received the federal funds.
"Companies like Solyndra are leading the way toward a brighter and more prosperous future," Obama said during a 2010 visit to the company's Fremont headquarters.
Although Solyndra was buttressed by VC and federal money, the company struggled. Among the challenges that doomed Solyndra: Low-cost Chinese manufacturers backed by large subsidies from the government are building massive factories that have rapidly driven down the price of solar panels and shifted more than 50 percent of production to China.
Yet analysts also noted that Solyndra had failed to curb its manufacturing costs. Industry watchers pointed out that Solyndra's solar tubes were still about two or three times as expensive as the standard costs for solar manufacturers in the United States.
House Republicans vow to continue their probe of the Energy Department’s $535 million loan guarantee to Solyndra, saying the solar equipment manufacturer’s announcement Wednesday that it will file for bankruptcy underscores that the federal aid was a “dubious” investment.
DOE initially made the loan guarantee in 2009, shortly before the company closed one of its factories and laid off workers. The company ended up using $527 million of the loan guarantee, according to DOE spokesman Damien LaVera. President Barack Obama touted Solyndra as a success story for the administration’s stimulus and green jobs strategy, going so far as to tour and give a speech in May 2010 at the company’s plant in Fremont, Calif.
“Unfortunately, Solyndra is just the latest casualty of the Obama administration's failed stimulus, emblematic of an economic policy that has not worked and will not work,” Upton and Stearns said.