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Solar company's plant closing deals economic blow

WASHINGTON — California solar manufacturer Solyndra announced Wednesday that it is shutting down a factory built with the help of a $535 million federal loan guarantee and would file for bankruptcy.

It's the latest blow to U.S. efforts to regain a top spot in solar manufacturing and create jobs in the globally fast-growing clean-energy sector. Another U.S. company, Evergreen Solar, filed for bankruptcy in August.

Solyndra put 1,100 people out of work with the closure of its plant in Fremont, Calif. President Barack Obama visited the factory in May 2010 and stressed the importance of increasing U.S. production of solar panels.

Solyndra, which made cylindrical solar photovoltaic systems for commercial rooftops, said in a statement that it couldn't scale up fast enough to compete with larger foreign manufacturers. It had been struggling with competition from China.

The company exported its solar systems around the world, most recently to a supermarket rooftop in a suburb of Brussels. It also built the rooftop solar system for Seattle's football stadium, Qwest Field, home of the NFL's Seahawks.

Solyndra president and chief executive Brian Harrison said the company's failure was unexpected. He blamed regulatory policy changes that created oversupply and falling prices, and said it had become impossible to raise capital.

The global economics of solar power have been changing fast, the Energy Department said in a blog-post response to the Solyndra news. It cited these trends:

• China, which exports more solar panels to the United States than any other country, has been providing interest-free financing to its companies.

• European countries have been reducing their subsidies for solar power. Europe is the world's biggest solar market.

• The price of solar cells has fallen 42 percent since the start of the year.

In Congress, the Solyndra loan guarantee already had become the focus of a fight over Obama's economic stimulus program, which included money to boost renewable energy.

The Republicans who control the House Energy and Commerce Committee had been investigating the use of stimulus money in 2009 for the Solyndra loan guarantee. The company ran into financial problems afterward and hadn't hired as many people as expected.

The committee issued a subpoena in July that compelled the White House Office of Management and Budget to turn over documents about the Solyndra loan guarantee.

Energy Department spokesman Dan Leistikow noted that private investors had put more than $1 billion into Solyndra and the company had sold more than 1,000 solar systems in 20 countries.

Leistikow defended the loan guarantee program, writing on the department's blog, Energy.gov:

"We have always recognized that not every one of the innovative companies supported by our loans and loan guarantees would succeed, but we can't stop investing in game-changing technologies that are key to America's leadership in the global economy. These projects, which include more than 40 other companies, are on pace to create more than 60,000 jobs."

Solar company's plant closing deals economic blow 08/31/11 [Last modified: Wednesday, August 31, 2011 10:10pm]
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