After Bankruptcy, Problems Still Abound for Failed Solar Company
Loveland’s Abound Solar has been in the news a lot since it went bankrupt this summer. Now, according to new documents obtained by the Northern Colorado Business Report, the reasons for its failure are finally becoming clear.
KUNC’s Erin O’Toole talks with Business Report publisher Jeff Nuttall about what their newsroom has turned up.
Erin O’Toole: We know Abound Solar manufactured solar panels, and was launched with pretty high expectations. Let’s explain a bit more about the company and how it failed.
Jeff Nuttall: Well, Erin, Abound Solar was founded in 2007 as a Colorado State University spinoff. With bipartisan support from members of Congress, it received a $400 million loan guarantee in 2010 from the U.S. Department of Energy as part of the Obama administration’s stimulus package. It borrowed $70 million on that loan, and then declared Chapter 7 this past July.
O’Toole: What were the consequences of the bankruptcy?
Nuttall: Sadly, the company shuttered facilities in both Larimer and Weld counties and laid off more than 400 people. The Department of Energy says taxpayers are expected to lose $40 million to $60 million in the bankruptcy, and there are local investors who were involved that will also lose big as well.
O’Toole: Abound Solar blamed competition - unfair competition, really, from the Chinese for the company’s bankruptcy, didn't they?
Nuttall: Yes, that’s correct. Abound has indeed blamed competition from the Chinese for its failure in media interviews and testimony before Congress. But China’s government has, in fact, supported its solar industry with tens of billions of dollars in subsidies.
O’Toole: Right. So, what has the Northern Colorado Business Report found?
Nuttall: Our reporter, Steve Lynn, put in a Freedom of Information Act request and found that Abound Solar’s problems went far beyond what we’ve heard. According to the reports that Abound itself submitted to the government, it was experiencing problems with its equipment and solar panels. That, in turn, led to revenue expectations throughout 2011 that never hit their mark.
O’Toole: What else did Steve uncover?
Nuttall: Rather than pointing to foreign competition, Abound told the energy department that it was seeing failures in the buss bars in its solar panels. Buss bars conduct electricity – which I think is the whole point here. The company also said that it had to spend money to recycle panels with the defective buss bars that it had produced in 2010, the year it received the loan guarantee.
O’Toole: So it sounds like Abound knew it had problems with components of its panels when it received the loan guarantee from the energy department.
Nuttall: That’s exactly what Congress is investigating. Lawmakers are now trying to learn what, if anything, the energy department knew about Abound Solar’s manufacturing problems before it agreed to the $400 million loan guarantee.
O’Toole: What have members of Congress found?
Nuttall: Well, these investigations are ongoing. But so far House Republicans have suggested that a report from an engineer indicated performance problems with Abound’s solar panels two months before the DOE closed on the loan guarantee.
O’Toole: And let me just add here that a Department of Energy spokesperson told the Denver Post this week that these reports or emails may have been cherry-picked and don’t reflect the full truth of the situation. Besides the House Republicans, Weld County District Attorney Ken Buck is also investigating, though his office says it's not related to the Congressional investigation. What’s the nature of his probe?
Nuttall: Buck is looking into securities fraud allegations. That investigation includes exploring whether representatives of the company knew that the company’s products were defective and then asked people to invest in the company without disclosing the deficiencies.