Solyndra Files for Insolvency

Solyndra LLC, the American manufacturer of innovative cylindrical solar systems for commercial rooftops announced on August 31, 2011 that global economic and solar industry market conditions have forced the Company to suspend its manufacturing operations. Solyndra subsequently filed a petition for relief under Chapter 11 of the U.S. Bankruptcy Code on September 5, 2011 while it evaluates options, including a sale of the business and licensing of its advanced CIGS technology and manufacturing expertise. With the discontinuation of operations and ceasing of business by Solyndra LLC in the United States, Solyndra's subsidiary, Solyndra International AG in Baar, Switzerland and its subsidiary Solyndra GmbH in Holzkirchen, Germany, no longer have access to funding. As a result, Solyndra International AG and Solyndra GmbH have similarly ceased operations and are expected to file for insolvency under the laws of their respective jurisdictions in the coming days. Despite strong growth in the first half of 2011 and traction in North America and EMEA with a number of orders for very large commercial rooftops, Solyndra could not achieve full-scale operations rapidly enough to compete in the near term with the resources of larger foreign manufacturers. This competitive challenge was exacerbated by a global oversupply of solar panels and a severe compression of prices that in part resulted from uncertainty in governmental incentive programs in Europe and the decline in credit markets that finance solar systems. "We are incredibly proud of our employees, and we would like to thank our business partners for their strong support in the last years," said Clemens Jargon President of Solyndra International AG and Managing Director of Solyndra GmbH. This step of Solyndra LLC with direct unavoidable consequence for the AG and GmbH was an unexpected outcome and is most unfortunate." Customers who have implemented Solyndra solutions can be assured that their systems will generate economical, clean, solar power for decades. It is reported in the US that the Obama Administration has no intention of dropping its investment in renewable energy programs despite the bankruptcy of this high-profile solar manufacturer backed by federal loan guarantees, according to a top U.S. Energy Department official. The bankruptcy and criminal investigation into California-based Solyndra LLC has caused severe embarrassment to the Obama administration's efforts to support a clean energy program with loan guarantees and subsidies. "While we are all disappointed in the outcome, securing America's leadership in this vital new industry requires that we support innovation and deployment," Jonathan Silver, who heads the energy department's loan guarantee program, told members of a House Energy and Commerce subcommittee. "I can't imagine a scenario in which we would willingly as a country walk away from what would be undoubtedly one of the largest if not the largest industry in the world over the next several decades," he told a hearing called to probe the Solyndra loan. Silver testified that the loan guarantee was granted to Solyndra based on the company's merits and not due to any political pressure or favouritism. "Was Solyndra just one bad bet by an administration rushing to claim credit for the loan guarantee or is it the tip of the iceberg?" asked Fred Upton, chairman of the House Energy and Commerce Committee. If the administration was so wrong about Solyndra after nine months of due diligence how can it possibly exercise the proper controls when doling out another $10 billion in the next couple of weeks?" President Obama praised the company for its technology during a visit to its manufacturing facility last year, making the company a centerpiece of the administration's efforts to stimulate the economy and create green jobs. FBI agents have searched the company's offices, in a possible investigation over the rewarding of the federal loan guarantees. The solar-power manufacturer received a $535 million federal loan guarantee in 2009, the first awarded under the program to support innovative green technologies. Solyndra's top executives were invited to testify before the subcommittee on Wednesday, but delayed their appearance until next week. Solyndra is the third U.S. solar company to declare bankruptcy in recent weeks. www.powersystemsdesign.com