Dozens of solar focused companies around the globe have disappeared through bankruptcy, insolvency, or just shutting their doors since 2009 when prices of solar panels plunged as competition from China increased.
In addition, other solar installations have not delivered their promised capacity or have experienced a variety of mishaps.
SunEdison was a red-hot company in a red-hot space—renewable energy. Its market capitalization reached nearly $10 billion, putting in on a par with the likes of Wynn Resorts of Las Vegas. With plans to buy Vivint Solar for $2.2 billion, SunEdison appeared unstoppable. (1)
Yet, SunEdison filed for bankruptcy after 13 years of fast growth and federal support to the tune of $1.5 billion in taxpayer money. The company heads into Chapter 11 with $20.7 billion in liabilities and only $16.1 million in assets. (2)
A company that was once worth more than $10 billion in now valued at $150 million. (3)
SunEdison's filing for bankruptcy was one of the largest in a series of recent green-energy failures but it is far from being the only troubled green-energy business. Even before SunEdison, the landscape of green-energy companies was littered with failed strategies.
Abengoa, which grew from a small electrical equipment company in Seville, Spain to a multinational solar and biofuel giant, is in restructuring proceedings in the United states and abroad. (1)
Another high profile failure was that of Solyndra, a solar module manufacturer which became a symbol of green energy ambitions gone awry for the Obama administration after it burned through $537 million in government loans.
While solar advocates like to say that solar is cost competitive with traditional forms of energy, several states have found that to not be the case. In Hawaii and Nevada, interest in solar waned when these states modified their incentives for solar power, cutting back on their net metering programs and making rooftop solar owners pay for their use of the electric grid. In both cases, the program changes resulted in many fewer customers investing in solar power. (4)
After Hawaii's lucrative net metering program ended last October, the solar industry in the state lost about 450 jobs. Total employment is now is just around 600.
In Nevada, solar companies realized that without the original subsidies, rooftop solar economics would be unworkable. After the new rate took effect on January 1, 2016, the larger solar companies (SolarCity, Sunrun and Vivint) announced that they had to cease operations in the state and local installers reduced staff. (4)
Despite incentives, solar energy technology continues to remain a high-cost energy operation making up just 1% of US and global energy generation. The investments made to generate solar output are often at a premium much higher than for energy output derived from traditional measures or other renewable energy options. (5)
Facility issues have also been a problem.
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Investigation into whether solar energy companies improperly received billions of dollars in tax incentives from the Obama administration
A massive solar power plant built near Gila Bend with the help of $1.45 billion in federal loans so far has failed to generate as much power as promised, struggling with problems from leaking chemicals to fire. (6)
In May, some misaligned mirrors at Ivanpah, the largest thermal energy plant in the US, caused an electrical fire that took out one of the plant's three boiler towers. The fire came as the plant had been under pressure from the California Public Utilities Commission (CPUC) for failing to meet its production targets in the two years since the plant opened. (7)
The plant has had other issues. In early 2014 when it went online, pilots complained repeatedly of being blinded by reflections from the plant. This may have occurred because workers were still testing and adjusting the heliostats. Environmentalists are also torn about the project. The heliostats are so powerful that heat has killed thousands of birds. Ivanpah is required to keep close track of these incidents and report bird deaths annually.
Energy from the plant has yet to become cost effective, running about $200 per megawatt hour during the summer and $135 per megawatt hour during the rest of the year. By contrast, solar power sold from traditional plants in 2015 went for about $57 per megawatt hour. According to the The Wall Street Journal, the construction of the solar thermal plant was financed with $1.5 billion in federal loans, as well as investment from Brightsource Energy, NRG Energy and Alphabet Inc., the parent company of Google. (7)
On another front, Congressional lawmakers have launched a formal investigation into whether solar energy companies improperly received billions of dollars in tax incentives from the Obama administration. (8)
The Senate Finance Committee and the House Ways and Means Committee sent letters to seven foreign and domestic companies in the solar industry, expanding a more limited probe started earlier this year. The recipients included three firms in the residential solar industry, SolarCity Corp., Sunrun Inc., Sungevity Inc., and four utility companies, SunEdison Inc., Abengoa SA, NextEra Energy Inc., and NRG Energy Inc. Congressional investigators are examining the use of tax incentives for solar power companies, third-party financing and how the companies determine the value of the credits. (8)
References
Julie Creswell and Diane Cardwell, “Renewable energy stumbles toward the future,” The New York Times, April 22, 2016
Herman Cain, “SunEdison goes bankrupt in spite of (or because of ?) $1.5 billion in federal backing,” Canada Free Press, April 24, 2016
Patrick Wood, “Pending bankruptcy of largest solar company puts alternative energy industry into full meltdown mode,” Canada Free Press, April 16, 2016
Institute for Energy Research, “Solar power dependence on subsidies,” October 21, 2016
Arduin, Laffer & Moore Econometrics, “The high cost of rooftop solar subsidies,” Institute for Energy Research, October 2016
Ryan Randazzo, “Large solar plant fails to reach its energy capacity,” azcentral.com, June 16, 2016
Megan Geuss, “Errant concentrated sunbeam starts fire at solar thermal plant in the desert,” arstechnica.com, May 21, 2016
Brody Mullins et al., “Investigation of solar firms widens,” The Wall Street Journal, September 16, 2016
Jack Dini is author of Challenging Environmental Mythology. He has also written for American Council on Science and Health, Environment & Climate News, and Hawaii Reporter.
