Abound Solar gets U.S. DOE loan guarantee
SAN FRANCISCO (Reuters) - The United States Department of Energy has given final approval to a $400 million loan guarantee to Abound Solar to expand production of its thin-film photovoltaic modules, a market pioneered by First Solar, the company said on Tuesday.
Abound also announced that it had raised $110 million from investors that include Invus Group, Bohemian Companies, DCM, GLG Partners, Technology Partners, BP Alternative Energy and West Hill Investors.
With the $110 million, the company, based in Loveland, Colorado, has received a total of $260 million in funding since its founding in 2007 and plans to expand in Colorado and Indiana.
The half billion dollars in new debt and equity is a huge sum for a three-year-old start-up that will produce just 30 megawatts of solar modules this year.
By contrast, First Solar -- the Tempe, Arizona global heavyweight that makes the same type of cadmium telluride photovoltaic panels that Abound does -- has a manufacturing capacity of 1,430 megawatts.
And therein lies the reason for the enthusiasm for Abound: The start-up's strategy is to feed from the crumbs that fall off First Solar's table in a booming market that the leader cannot supply on its own.
"First Solar has been the only game in town," Tom Tiller, Abound's chief executive, said in an interview. "Customers today don't have an alternative to First Solar if they want cad tel," he added, using industry shorthand for cadmium telluride.
"The opportunity in the market is to be a second source of supply for cad tel panels," he said.
The big bets investors and taxpayers are making on Abound are that it will eventually be able to match First Solar's low cost of production and that First Solar will not be able to keep up with demand.
While cadmium telluride panels are less efficient at converting sunlight into electricity than conventional photovoltaic modules, they do not use expensive polysilicon and can be manufactured more cheaply.
That advantage led General Electric earlier this year to announce that it would develop cadmium telluride modules with PrimeStar Solar, an Arvada, Colorado, company in which GE holds a majority stake.
Cadmium telluride solar panels typically are used to build photovoltaic power plants for utilities or are deployed to generate electricity for large commercial facilities.
Abound will tap the federal loan guarantee to expand production at its Longmont, Colorado, plant and build a new 781,000-square-foot factory in Tipton, Indiana.
Tiller said the expansion of the Colorado facility will be completed in 2012 and raise its annual production to 200 megawatts. Work on the Indiana factory, which was built to make automobile transmissions for Chrysler but was abandoned before it could start production when the carmaker filed for bankruptcy, will begin in 2012 and will give Abound a total manufacturing capacity of 840 megawatts by 2014. The new plants will employ 1,200 people.
(Editing by Peter Henderson)