Another federally backed solar company will declare bankruptcy, the Department of Energy announced Thursday.
Abound Solar Inc., which was awarded $400 million in federal DOE loan guarantees and a $9.2 million loan from the taxpayer-backed Export-Import bank, is closing its doors and filing for bankruptcy.
"When the floor fell out on the price of solar panels, Abound’s product was no longer cost competitive," Energy Department spokesman Damien LaVera wrote on the agency’s website. "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. Of the $400 million that Abound was originally approved for, the Department only lent the company less than $70 million."
The agency says that, once the bankruptcy liquidation is complete, it expects the total loss to the taxpayer to be between 10 and 15 percent of the original loan amount.
Abound Solar struggled to meet goals and remain solvent since its 2011 loan guarantee. In February, the company announced a series of layoffs. A report also revealed failures with some of its products prior to its loan guarantee.
The House Oversight Committee, which has been investigating the loan program, said the bankruptcy was yet another result of the Obama administration's politically driven decisions.
"As part of its examination of President Obama’s failed green energy agenda and botched loan program, the Oversight Committee spotlighted in January the very real risks to taxpayers from Abound’s weak balance sheet. Abound received a junk credit rating of B, below that of the failed Solyndra," Oversight Chairman Darrell Issa (R., Calif.) said in a statement, "Today, that risk has become a reality, demonstrating yet again that taxpayers pay the price when the Obama Administration makes politically-motivated decisions as part of its failed green energy agenda."
Abound’s bankruptcy follows a string of setbacks and bankruptcies for President Obama’s highly touted "green energy initiative." The Energy Department has funneled $34.7 billion in federal loans to green energy companies to finance the "clean energy economy."
The first major failure was Solyndra, recipient of a $535 million loan guarantee.
Other green energy companies followed. Beacon Power, the recipient of a $43 million DOE loan guarantee, announced bankruptcy in October 2011. Ener1 Inc., which owns a company that received a $118 million DOE grant to make electric-car batteries, filed for bankruptcy in January. Another solar company, Amonix, received a tax credit worth roughly $6 million for a new facility in Las Vegas, but it recently announced it was laying off about 200 workers, almost two thirds of its workforce.
Solar Trust, which received a $2.1 billion conditional loan guarantee, filed Chapter 11 bankruptcy in April.
Nearly one-third of the Energy Department’s loan recipients are at risk of default.
Published under: Abound Solar , Bankruptcy , Department of Energy , Green Energy , Obama Administration