By Scott Austin
While accepting an excellence award from a local economic development group, the CEO of solar cell maker SpectraWatt Inc. raved about the company’s prospects. “Things are going gangbusters here,” Andrew Wilson said in October, according to the local paper Poughkeepsie Journal. “I don’t know that I could describe a better situation than the one we’re in now.”
Wilson said then that SpectraWatt’s solar cells were sold out, it had not inventory in stock, and the Hopewell Junction, N.Y.-based company was going to hire more people to meet the “huge” demand.
Two months later, the Intel Corp. spinoff is teetering on the brink of closure.
It’s not clear what led to the sudden turn of fortune for the company. It is true that the solar cell market is highly competitive, with prices dropping about 15% in the past couple of months. Another U.S. manufacturer of solar cells, BP PLC, closed shop in the U.S. earlier this year and is outsourcing to China and Mexico.
“The current development is very disappointing for us,” wrote a spokeswoman for Solon SE, a SpectraWatt investor, in an email to VentureWire.
Disappointment is at least one of the emotions that is probably hovering over the residents near Hopewell Junction, where SpectraWatt opened its new manufacturing facility just this May.
The company said it may be laying off more than 100 employees there. This will probably happen by April, according to Gordon Rutherfurd, of the Dutchess County Economic Development group, which had courted SpectraWatt to bring it to New York.
SpectraWatt’s representatives didn’t respond to requests for comment.
The company spun off from Intel in 2008 and raised $50 million from Solon, Intel Capital, PCG Clean Energy Technology Fund, and Cogentrix Energy, a unit of Goldman Sachs Group. It then brought in $41.4 million in convertible debt earlier this year. Such debt is typically converted into equity with the new round, but no such round of venture finance has been announced.
Solon still holds a stake of about 16% with book value of EUR6.5 million, wrote Therese Raatz, spokeswoman for the German company which makes solar modules and installs solar projects in the U.S. Solon would “have to write off [the book value] in case of a final shut-down of SpectraWatt’s activities,” Raatz said. Solon also has an agreement to buy solar cells from SpectraWatt in 2011.
Negotiations to find a new investor are ongoing, according to another Solon spokeswoman Sylvia Ratzlaff. “We see chances that SpectraWatt might continue as a company,” Ratzlaff wrote.
At least one U.S. solar cell company, Norcross, Ga.-based Suniva Inc., appears to be doing well. “Suniva is not seeing any slowdown, in fact we have been sold out for the last year and are sold out for most of 2011,” wrote Suniva CEO John Baumstark in an email to VentureWire.
One of SpectraWatt’s customers, Solartech Renewables, had Suniva as its back-up supplier, and will try to buy cells from that company should SpectraWatt not produce the cells under contract, said Todd Roberts, CEO of Solartech. But since Suniva is back-ordered, Roberts may have to turn to foreign suppliers.