Another stimulus-funded solar company is struggling financially. Abound Solar Inc. received $400 million in U.S. loan guarantees to build two solar panel manufacturing facilities.[i] The company shut down its one plant in Colorado and fired 180 workers—about half of its workforce—because solar panel prices fell by 50 percent last year.[ii] According to Abound, “it is shutting down production of its first-generation solar module to speed the changeover necessary to launch the next-generation module, which it says will be much more efficient.”[iii] So far, Abound has collected about $70 million of its taxpayer-funded loan guarantee.[iv] Abound Solar was also expected to erect another solar manufacturing plant in Tipton, Indiana, but has delayed its construction.

In another solar-related bankruptcy, Energy Conversion Devices, Inc. filed for bankruptcy in a Michigan court and wants to sell its solar subsidiary, United Solar Ovonic, among other assets. Energy Conversion Devices stopped its production of lightweight, thin-film photovoltaic products for commercial rooftops at United Solar Ovonic last November because it had too much inventory, furloughing 400 workers with plans to lay off another 500 workers. The company, who has not turned a profit since 2009, lost $306.4 million last fiscal year, ending June 30, 2011.[v] Energy Conversion Devices was the fourth bankruptcy involving a solar manufacturing company in the past year, preceded by Solyndra, SpectraWatt, and Evergreen Solar Inc. Energy Conversion Devices also filed a bankruptcy case for Solar Integrated Technologies, a subsidiary that performs engineering, procurement, and construction of solar technologies.[vi]

Solar Subsidies Decline

European countries and the United States are cutting subsidies to renewable energy, particularly solar. According to Citi analyst Timothy Arcuri, Germany is expected to cut government solar incentives by as much as 35 percent in April, much more than the 10 to 20 percent originally expected. Germany is the world’s largest market for solar panels. The German government pays homeowners and businesses for the energy they produce from solar panels.[vii] Because of the generous subsidies, Germans installed 7.5 gigawatts of photovoltaic capacity in 2011, more than double what the government had expected, causing an increase of $260 in the average consumer’s annual electricity bill.[viii] Spain and France also lowered their government support for renewable technologies.[ix]

The 1603 program in the United States expired at the end of 2011, where the government rebated 30 percent of the investment cost in a qualified renewable facility, such as solar. Solar investments in the United States still receive a 10 percent investment tax credit subsidy—a less attractive subsidy than the 1603 program provided. In his recent budget submission, President Obama requested that Congress renew the 1603 program, which is believed to have helped develop more than $24 billion of power plants fueled by renewable sources.[x]

Environmental Issues with Renewable Development

A government-backed solar project in California has found that the rush to construct the facility by government agencies has resulted in environmental issues. The $1 billion Genesis Solar Energy Project in Southern California was expedited by state and federal regulatory agencies to demonstrate that solar facilities can be built quickly in the United States. But, the project, backed by $825 million of Department of Energy (DOE) funds, was required to meet stringent deadlines by the department. The 250-megawatt plant, planned to be built on federal Bureau of Land Management (BLM) land in the desert east of Los Angeles, is threatened by a deadly outbreak of distemper among desert kit foxes, protected under California law, and the discovery of a prehistoric settlement at the project site, protected by the federal Native American Graves Protection and Repatriation Act.

Native Americans indicate that “accelerated procedures approved by state and federal regulators failed to protect wildlife and irreplaceable cultural resources.” It is believed that more research and planning could have avoided the problems that may result in the loss of hundreds of millions of taxpayers’ dollars and another embarrassment to the Obama administration’s solar initiative. To meet DOE deadlines, the company did not follow customary methods for searching for human remains that are more costly and time-consuming than the procedures that were used, developed by the state energy commission and the BLM to expedite this project and three other desert solar projects.[xi]

Some critics believe that the state was interested in fast-tracking the project to help meet California’s mandate of achieving 33 percent of its electricity from renewable energy by 2020. According to the California Energy Commission, the Genesis project was approved despite “significant environmental impacts” that were deemed to be outweighed by “overriding economic, legal, social, technological or other benefits.”[xii]


European countries are finding that they over extended their budgets in subsidizing solar energy projects and are having to withdraw some of those subsidies. It appears that competition from China and over capacity in solar panels is plaguing the solar panel manufacturing industry causing a number of bankruptcies in government-backed projects in the United States. That means taxpayers are losing more than just the government sponsored subsidies that are supposedly needed to get these projects off the ground. In fact, government regulators are rushing these projects to the point that normal procedures for determining sites have been superseded by new methods developed by government agencies that have proven costly to the projects.

[i] Bloomberg, Abound Solar Shutters Plant, Raising Specter of Solyndra Failure, February 29, 2012,

[ii] Denver Post, Loveland-based Abound Solar cuts 180 jobs at Longmont facility, February 29, 2012,

[iii] Reporter Herald, Loveland-Based Abound Cuts 180 jobs at Longmont facility, February 28, 2012,

[iv] Wall Street Journal, More Trouble for Solar-Energy Program, February 29, 2012,

[vi] Reuters, Energy conversion files for bankruptcy protection, February 14, 2012,

[vii] Huffington Post, Solar Industry Overcapacity Could Drag On for Some Time, February 14, 2012,

[viii] Real Clear Markets, The Global Warming Bubble, March 6, 2012,

[ix] Bloomberg, First Solar to Vestas Wind Profit Crash Deters New CEOs Energy, February 13, 2012,

[xi] Los Angeles Times, Problems cast shadows of doubt on solar project, February 11, 2012,,0,4708180.story

[xii] The Washington Free Beacon, Mean Green Killing Machines, February 29, 2012,


Correction Mar. 14, 2011–Previously this post stated that Abound had filed for bankruptcy. This is incorrect.

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