Three weeks before Solyndra, the solar-panel manufacturer, based in Fremont, declared bankruptcy, the United States Department of Energy issued a $197 million loan guarantee to another Bay Area solar company that uses the same innovative, but risky, technology.
Like Solyndra, which failed despite a $535 million federal loan guarantee, SoloPower, based in San Jose, is a politically connected firm that produces thin film panels built with copper, indium, gallium and selenium (or CIGS) instead of silicon, the basis of most photovoltaic panels.
Energy Department officials have cited a worldwide drop in silicon prices as a major factor in Solyndra’s demise. Some analysts are now looking at SoloPower and asking why the federal government — as it worked furiously to keep Solyndra from going bankrupt — made a major investment in a company that relied on a similar technology.
In its six-year existence, SoloPower has experienced internal discord — it paid a $20 million buyout to its founders — and has yet to turn a profit. But Tim Harris, the chief executive, bristled at comparisons between his company and Solyndra during a recent interview at SoloPower’s headquarters in south San Jose.
“Our play has never been about the price of silicon,” Harris said, but about producing a “low-cost, high-performance product.”
Solyndra, Harris said, produced expensive cylindrical tubes that had to be mounted on racks on large white roofs. But SoloPower’s panels, he said, while using the same copper-based CIGS technology, will be less expensive for consumers. SoloPower panels are plated on rolls of flat stainless-steel substrates instead of being encased in glass, and they can be laminated directly onto a building’s top without costly construction.
“We believe we have a truly innovative technology,” Harris said.
Harris said the federal loan guarantee, which is underwriting the construction of two new factories in Portland, Ore., and the expansion of the company’s San Jose headquarters, will allow SoloPower to be profitable for the first time. The development is also expected to lead to 450 permanent jobs, mostly in Oregon, according to the company.
But analysts say it is unclear whether SoloPower’s costs are lower than Solyndra’s. “They have not yet revealed anything on their costs of production,” said M.J. Shiao, a solar markets analyst at GTM Research. “Their small scale means they are noncompetitive right now, but as with all technology startups, it’s about dialing in a technical formula and then ramping up to scale to reduce costs before cash runs out.”
SoloPower has experienced its share of ups and downs since it was founded by two engineers, Homoayoun Talieh and Bulent Basol, in Milpitas in 2005.
Like other alternative-energy companies, it was heavily subsidized from the start, receiving its first Energy Department grant, $2.3 million for advanced photovoltaic research, in 2007. Later that year, the San Jose Redevelopment Agency lured the company out of Milpitas when it agreed to pay for $715,000 worth of manufacturing equipment and find another $100,000 to subsidize worker training.
Since then, SoloPower has been awarded more than $6 million in grants, loans and tax breaks from the State of California. In an interview, Mayor Chuck Reed of San Jose said he had written to the Energy Department on SoloPower’s behalf. Reed also said he had met multiple times with Jonathan Silver, the director of the loan guarantee program, urging Silver to act more quickly after a company submits its application.
But none of those subsidies was significant enough to persuade the company to build its first major factory in the South Bay. When Oregon offered SoloPower $40 million in loans and tax breaks to augment the Energy Department’s $197 million loan guarantee, the company decided to build in Portland.