Reasons for the Bankruptcy of Solyndra

Published:2011/9/2 3:15:00 Author:Phyllis From:SeekIC

The reasons for the bankruptcy of Solyndra, a most high-profile and innovative solar panel makers in the United States, include high manufacturing costs, a niche product form factor, massive competing investments from China and a sluggish economy.

The company’s emerging copper indium gallium selenide technology and thin film approaches do not include these problems. However, Solyndra’s demise may scare investors away from supporting such alternatives in the face of mainstream crystalline technology.

Analysts said this is not a good time for solar and people will make simple assumptions based on this one case and that’s unfortunate because they should not. It’s not surprising that the CIGs or thin-film technologies would win support from private and public investors.

Huge investments have been put into mass producing of existing crystalline technology in China, and the solar panel market is currently dominated by China with more than a half of solar panels using crystalline technology came from China. In 2010, about 54 percent of all solar panels came from China and Taiwan, and the number is expected to reach 60 percent in this year. China’s manufacturers provide panels at the price of $1.20 per Watt, lower than Solyndra’s manufacturing costs.

It is not good for the development of the industry because the profit margins are too low. Compared with crystalline, CIGS is more difficult to produce for it is very complex and there is no real standardization for it. As a factor driving the industry, price is not the only one but an important one.

Solyndra created a novel cylindrical solar cell and panel design for its focus markets of home and business type rooftop panels. However, the majority of solar sales are currently going to conventional flat panel designs.

Two other solar cell manufacturers filed for bankruptcy earlier this month, including Spectrawatt Inc., a solar cell maker originally spun off from Intel Corp and Evergreen Solar Inc., which announced it is closing a U.S. plant but maintaining one in China in 2008.

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