By Ben Geman - 06/28/12 05:59 PM EDT
Abound Solar, a company that won a $400 million Energy Department (DOE) loan guarantee in 2010 to manufacture advanced solar panels, is closing and filing for bankruptcy, according to DOE.
Abound’s collapse follows last year’s demise of the solar company Solyndra and is sure to feed Republican attacks on White House green energy programs despite support for Abound’s loan from several GOP lawmakers ahead of its approval.
“When the floor fell out on the price of solar panels, Abound’s product was no longer cost competitive. As a result, the company was unable to meet some of the financial milestones built into the loan agreement to protect the taxpayers and — in September 2011 — the Department halted disbursements on the loan,” said Energy Department spokesman Damien LaVera in a blog post on the department’s website.
The loan guarantee, completed in late 2010, was meant to support expanded manufacturing at a Colorado facility and plans for a manufacturing plant in Indiana, which never got off the ground.
DOE on Thursday sought to quickly limit the fallout from the bankruptcy.
LaVera’s post says that once the liquidation is complete, taxpayers are only expected to lose 10 to 15 percent of the original $400 million loan amount.
And the department is defending the embattled loan guarantee program. It was authorized in a 2005 energy law and later expanded and funded through the 2009 stimulus law that ultimately provided support for Solyndra, Abound and other companies in DOE’s renewable energy loan portfolio.
“While disappointing, this outcome reflects the basic fact that investing in innovative companies — as Congress intended the Department to do when it established the program — carries some risk,” LaVera said.
GOP lawmakers and presidential candidate Mitt Romney have been on the attack over last year's collapse of California-based Solyndra, which had won a $535 million guarantee in 2009, alleging the White House has been careless with taxpayer dollars and more broadly criticizing federal backing for green energy industries.
However, Republican lawmakers including Mike Pence (R-Ind.), Dan Burton (R-Ind.) and others supported Abound's loan application.
While the two solar manufacturing companies have gone belly up, and the DOE-backed energy storage company Beacon Power also went through bankruptcy, the department has emphasized that the overall portfolio is performing well.
Renewable electricity generation projects account for a much larger share of the overall renewable energy loan portfolio than manufacturing projects.
Solar manufacturing projects, which have faced stiff competition from Chinese competitors, account for less than four percent of the total DOE loan program, including loans to automakers, according to DOE.