Kokomo — Officials with Abound Solar, the Colorado-based solar panel manufacturer, announced Thursday the company is ending operations and declaring bankruptcy.
The company had been expected to bring as many as 1,000 jobs to Tipton County when it received a $400 million federal loan guarantee in 2010.
The company had planned to expand its manufacturing options from its home base in Longmont, Colo., to the vacant manufacturing space at U.S. 31 and Ind. 28 in Tipton County.
“We’re obviously very disappointed and sad about the announcement,” said Tipton County Commissioner Jane Harper “What can you do but remain optimistic?”
Harper said the county plans to work with the 850,000-square-foot building’s owner, W.W. Reynolds Inc., Boulder, Colo., to find a new tenant.
The first news of the pending bankruptcy appeared when U.S. Department of Energy spokesman Damien LaVera mentioned it in a blog posting Thursday.
LaVera said the federal government expects to lose between $40 million and $60 million on the Abound loan guarantees, after the company is liquidated. A loan guarantee means Abound has received a private loan, and if the company defaults, the federal government will repay the debt.
Abound secured the federal loan guarantees in December 2010, with the promise Abound would add between 800 and 1,000 jobs at the Tipton County factory, which has sat empty since it was completed in 2008.
The factory space was originally built for German company Getrag, a parts manufacturer that was going to produce transmissions on a contract basis for the former Chrysler Corp.
The signs that Abound was in trouble have been present for more than a year.
In September 2011, the Department of Energy halted disbursements on Abound’s loan guarantee, saying the company had failed to meet “financial milestones.”
By the time the loan money was halted, Abound had borrowed about $70 million in guaranteed money, LaVera said, adding that after the company is liquidated, the government expects its total loss to be between 10 percent and 15 percent of the original loan amount.
The company has also received about $300 million in private investment, Abound spokesman Trent Waterhouse said in a press statement Thursday.
Company officials announced the temporary layoffs of about 280 workers in February, saying the company needed to shut down its production lines and upgrade equipment to produce more efficient solar panels.
At the time, Abound officials said the retooling of its Colorado operations would delay the startup of the Tipton facility by a year.
Last month, Abound CEO Craig Witsoe told a congressional panel that American solar manufacturers believe their heavily-subsidized Chinese competitors have been selling their products below production costs.
LaVera said China’s government “offered more than $30 billion in government in 2010 alone, and is surging to capture roughly half the market.”
“While disappointing, this outcome reflects the basic fact that investing in innovative companies — as Congress intended the department to do when it established the [loan guarantee] program — carries some risk,” LaVera added.
Abound company officials also blamed Chinese competition Thursday, saying “the U.S. solar market has seen the prices for panels drop by more than 50 percent in the past year at a time when the value of imports of Chinese-made solar cells nearly quadrupled from $639 million in 2009 to $3.1 billion in 2011.”
Waterhouse said the company has tried to find a buyer in recent months, but was unsuccessful.
“Abound believes that competitive solar energy remains important to U.S. energy security and job creation; and that longer term, consistent renewable energy policy is critical to encourage further private investment in this sector,” company officials said in the press statement.
When the manufacturing facility was under construction, Tipton County took out $4.3 million in bonds to expand utility capacity for future development, and is repaying the bond holders with property tax revenue from the building.
Reynolds is current on the $465,000 annual property tax bill, and Abound has been paying around $3,000 to $4,000 a month in utilities. Harper said Thursday she’s trying to contact Reynolds to see how Abound’s bankruptcy will affect local taxpayers.