Michigan-based Energy Conversion Devices filed for bankruptcy Tuesday and intends to sell off its solar power subsidiary United Solar Ovonic (USO), which presents another setback for America's solar energy industry as manufacturers continue to go under.
We firmly believe there is a strong and sustainable commercial market for Uni-Solar products, said Julian Hawkins, ECD's President and CEO, in a Feb. 14 press release. However, our current capital structure and legacy costs are preventing USO from making the investments necessary for the future of the business without restructuring through the bankruptcy process.
The company's market shares collapsed amidst falling global prices for solar-technology products, high production costs and mounting debt. According to a report by Green Tech Media, the company suspended production at USO late last year, unable to unload its inventory onto the global market.
Given inventory on hand, we felt it was prudent to suspend production and manage cash--in order to live to see another day, ECD spokesperson Michael Schostak told GTM.
The restructuring effort was ultimately unable to keep the company afloat. According to the Detroit Free Press, USO employs 750 employees, 60 percent of which are based in Michigan. ECD announced that USO would continue to operate through the sale process.
The ECD subsidiary pioneered the production of solar cell technology, which although not as efficient as standard solar panels, are more flexible and compact, and can be integrated more easily into rooftops and other surfaces.
U.S.-based solar-technology manufacturers are receiving particularly stiff competition from Chinese companies, which have contributed to the drop in prices through lower production costs enabled by government subsidies and alleged currency manipulation.
American solar operations should be rapidly expanding to keep pace with the skyrocketing demand for these products, said Senator Ron Wyden (D -Ore.) in a Washington, D.C. press conference organized by American solar manufacturers last October. But that is not what has been happening. There seems to be one primary explanation for this; that is, that China is cheating.
Ryan Villarreal reports on foreign affairs with a focus on Latin America. He also covers human rights and environmental issues worldwide....