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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 Paj on 10/18/2012 9:15:20 AM , Rating: 1
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.

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.


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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