California solar company Solyndra plans to close one of its two factories and cut by half its production target over the next three years, according to reports.
The New York Times released the story just hours after polls closed on
Tuesday. Solyndra likely held onto the news as long as possible to avoid
giving Republicans additional firepower in the lead-up to midterm
elections.
Solyndra received a $535 million loan guarantee from the U.S. Department of Energy to build its second factory. Construction was completed in September, though it’s not clear whether or not production in the facility has begun. The company has also raised about $1 billion in venture capitol to support its unique cylindrical-shaped CIGS solar panels designed for rooftop installation.
It’s been common knowledge for months that the company is struggling. It cancelled plans for an IPO in June when audits raised questions about the company’s financial viability. This was followed by a replacement of CEOs.
Solyndra will close its first factory, which it says is less efficient than the new factory just completed in Fremont, California. The move is expected to save the company $60 million in capital spending.
The company will also let go of about 40 employees and not renew the contracts of an additional 135 temporary workers.
Solyndra also lowered its production capacity target for 2013 to 300 MW–down from 610 MW.
Solyndra’s financial difficulties stem from the fact that its cylindrical panels are more expensive to produce. The company says the cost is partially offset by cheaper installation prices, and that it will continue to drive down production costs in the years ahead to make the panels more price competitive.
Solyndra also claims that the cylindrical shape of the panels allows it to capture more sunlight in morning and evening hours, further justifying increased costs. However, one doesn’t have to look far to find critics that refute this claim.
The following is an excerpt from a company statement issued Wednesday morning:
“There is a clear need for more aggressive pricing. This plan allows us to stay very competitive on a fully installed cost basis with all in pricing next year around $3.50 a watt which we believe will be highly competitive or even lower than (silicon module-based system) pricing. We expect this plan will allow us to double shipments next year and take us to cash-flow positive by the end of 2011.”
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