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  (Source: seaportinnovationdistrict.com)
Satcon's financial demise was caused by increased competition with Chinese companies and decreased demand for solar power installations around the world

It's just not a good week for renewable energy companies. Just one day after A123 Systems filed for bankruptcy, solar company Satcon Technology has now filed for Chapter 11.

Satcon Technology, which is a Boston-based company that develops solar inverters, filed for Chapter 11 bankruptcy protection today as a result of the poor state of the solar power industry as well as financial earnings. It filed its petitions in the U.S. Bankruptcy Court for the District of Delaware.

Satcon's financial demise was caused by increased competition with Chinese companies and decreased demand for solar power installations around the world. 

From 2005-2011, the solar company posted annual financial losses. It also reported losses in the first six months of 2012, and announced that it would reduce its workforce by 35 percent in January. Around that same time, Satcon also mentioned closing a factory in Canada.

"This has been a difficult time for Satcon," said Steve Rhoades, Satcon's president and CEO. "After careful consideration of available alternatives, the company's Board of Directors determined that the Chapter 11 filings were a necessary and prudent step, allowing the company to continue to operate while giving us the opportunity to reorganize with a stronger balance sheet and capital structure. Our goal is for Satcon to emerge from bankruptcy reorganization and continue to provide our customers with the quality products that they need."

Satcon isn't the only solar company to file for bankruptcy. In September 2011, solar panel company Solyndra filed for bankruptcy after receiving a $535 million loan from the U.S. Department of Energy (DOE). After that, a line of other alternative energy companies also filed for Chapter 11 after receiving government loans, such as Beacon Power, a flywheel maker for grid efficiency that received $43 million in 2010, and Ener1, an electric vehicle (EV) battery maker whose EnerDel subsidiary won a $118.5 million grant in 2009. 

Just yesterday, EV battery maker A123 Systems filed for bankruptcy. It was reported that A123 was missing loan payments and finally decided to sell its automotive business assets to Johnson Controls, which is a company that optimizes energy efficiency in car batteries, buildings and electronics. The total value of the transaction was $125 million.
 


Sources: Washington Post, Reuters, Satcon Technology



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RE: Interesting
By AnnoyedGrunt on 10/18/2012 3:32:23 AM , Rating: 3
I've heard it said that it has become essentially impossible for USA based panel companies to compete with the Chinese. It's been implied that the Chinese companies were dumping panels to drive the cost down and force competitors out of business, but it may be that they are simply able to use their lower average standard of living to their advantage. Not sure how Euro solar panel companies are faring, but the US panel industry has been in tough times for the past year or so.

Keep in mind that the panel companies are different from the solar engery companies (typically). The energy company will buy panels that are the best value, and if you can't compete in watt/$, then as a panel maker you won't be around too long, even if the overall industry is growing.

-T


RE: Interesting
By Ringold on 10/18/2012 4:32:41 AM , Rating: 3
A highly under reported point is that Chinese panel producers aren't booming, either. There's consolidation and waves of bankruptcy among the weaker ones over there as well, as the entire world simply built WAY too much capacity. Exactly the sort of thing one expects when government tries to control a market.

Without financial data that I doubt is reliable and publicly available it'd be impossible to say for sure, but have to keep in mind Chinese factories probably have fixed costs whether they operate or not, same as any company. So if they're truly dumping panels below-cost, it might be because they lose less by producing than by idling. So it could be a case of Micro econ 101, where such a move is logical for the short run (but bankruptcy long run).

Again, this is a market that exploded only because of government diktat. Companies sprang up everywhere as the government seemed set to subsidize and mandate solar as far as the eye can see. Capacity blossomed.

Then reality hit. Homeowners in many places decided the return, or the cost of tying up the capital, didnt seem worth it. Governments realized, particularly in Europe, that money didnt grow on trees, so subsidies were cut or not expanded as hoped. Suddenly, there's tons of capacity, and nobody that wants it.

I also think we're the pot calling the kettle black if we REALLY go after China for the subsidized interest rate loans their solar companies get. Our companies get help from the Import-Export Bank and subsidies at the federal level and state, county and city governments in many cases threw every tax break in the book at a lot of our companies. Not to mention our very own low-interest loans via Obama and the DoE and stimulus. We're no less guilty, IMO.


RE: Interesting
By FITCamaro on 10/18/2012 7:33:28 AM , Rating: 3
Even with cutbacks, money is still being thrown around like candy here in the US for "green" energy. And these companies still can't stay in business.

The fact is, it's expensive, unreliable, doesn't work everywhere, and where it does work, still puts out less energy than other sources per dollar.

If I built my own home in an area where solar makes sense, would I have it built with the home? Sure. Individual solar installations make sense, albeit they're still more expensive than most people can afford. But building power plants out of solar panels do not. Power plants need to provide stable power at all times. Not just when the sun is up or the wind is blowing.


RE: Interesting
By paydirt on 10/18/2012 9:14:21 AM , Rating: 2
European governments are actually removing the subsidies. Some big ones have been removed already (Spain & Germany).


RE: Interesting
By FITCamaro on 10/18/2012 9:22:21 AM , Rating: 2
Is Europe in the US?


RE: Interesting
By Ammohunt on 10/18/2012 11:26:26 AM , Rating: 5
Lately under this administration its been hard to tell the difference...


RE: Interesting
By mdogs444 on 10/18/2012 9:46:00 AM , Rating: 2
To be fair, Spain did not remove their subsidies because the model was so successful. They did so because they have 25% unemployment and they are going bankrupt.


RE: Interesting
By Paj on 10/18/2012 9:15:20 AM , Rating: 1
quote:
Then reality hit. Homeowners in many places decided the return, or the cost of tying up the capital, didnt seem worth it. Governments realized, particularly in Europe, that money didnt grow on trees, so subsidies were cut or not expanded as hoped. Suddenly, there's tons of capacity, and nobody that wants it.


You couldnt be more wrong. Germany's solar capacity has quadrupled from 6GW in 2008 to 25 GW in 2011 - over half the world's solar capacity. The effect of this is that the wholesale price of energy during the day (ie when the sun is shining) has dropped dramatically - by up to 40 percent in some cases.

It's aim is to have 52GW of capacity installed by 2020. It only needs to add 3GW per year to achieve this, which is half the rate it is at currently.

http://arstechnica.com/science/2012/04/german-sola...

Even now, utility companies there are cutting their feed in tariffs as they are starting to lose money - but this hasn't dampened demand there at all. It's true that some companies have closed, but this just serves to make the existing companies more cost conscious, and adopt better working models.

Solar is approaching grid parity, even without subsidies. Germany's solar expertise continues to grow, to the point where it will start exporting its know-how overseas. There is a huge opportunity for US and Chinese companies to get involved.


RE: Interesting
By Wy White Wolf on 10/18/2012 9:57:57 AM , Rating: 2
I get the impression that he was writing about manufacturing capacity.

With Germany only needing to add 3GW a year to reach it's goal means demand for new panels and equipment is cut in half. Lower demand can't support all the suppliers so many are going bankrupt.

Simple supply and demand.

WWW


RE: Interesting
By Ringold on 10/18/2012 5:09:07 PM , Rating: 1
Like the other guy said, I was referring to manufacturing capacity, since the article is all about manufacturers, not power utilities.

Germany is also one of the worlds very few bright spots. Germany didn't go hog-wild and jump on the spend-now, pay-never socialist pandering model southern Europe did, so Germany can afford to waste money on solar.

And Germany's a nation I'd never bring up as being intelligent on energy policy; they're working to make their country permanently nuclear-power free, and they've long been strangely comfortable with their Russian oil and natural gas overlords. Germany's also, in the grand sweep of the world, squarely a 'mediocre' at best location for capturing sunlight.


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