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Et tu, Solyndra?

By Matt Artz
Tuesday, April 6th, 2010 at 10:13 am in Uncategorized.

solarWith NUMMI closed, solar panel maker Solyndra has emerged as one of Fremont’s highest profile companies. But with Solyndra preparing to go public,  the company disclosed to potential investors that its future might not be so bright.

A TCB reader sent me this item from one of the stories, but I’m not sure which one  (oops it’s from the Argus):

Solyndra Inc.’s solar panels are about 66 percent more expensive than those made by the Fremont company’s rivals — a cost difference that imperils Solyndra’s revenue growth and market opportunities. The unsettling disclosure came in a regulatory filing by Solyndra, which hopes to stage an initial public offering of its stock. 

Solyndra’s solar panels, which are shaped like cylinders, come with an average sales price of $3.24 a watt, compared with an average price of $1.95 per watt for solar panels sold by foes. 

Solyndra also warned its accumulated deficit of $557 million, including a 2009 loss that totaled $172.5 million, threaten the solar company’s ability to survive. “The company has suffered recurring losses from operations, negative cash flows since inception,” Pricewaterhouse Coopers, Solyndra’s auditor, wrote in a note contained in the regulatory filing. 

The auditor also said the issues “raise substantial doubt” about Solyndra’s “ability to continue as a going concern.”

For full stories, click here and here.

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  • http://fcnisbacon.wordpress.com/ Marty

    People, don’t sweat this. The Vinnie Bacon/Kathy McDonald vision of industrial development at the NUMMI site will render a much better result — Fremont is special, and viable companies want to come here!

  • http://www.ishanforcouncil.com Ishan Shah

    My uncle actually told me something along the same lines, he works for a company that supplies solyndra with some part or the other. He said his higher-ups were worried that Solyndra won’t be getting enough orders to maintain this new plant. I hope he isn’t right.

    Marty:

    We can’t deny that there’s a lot of good to be done, and a lot of money to be made, by leading the charge on greentech! Although, I understand your feelings about the NUMMI site.

  • http://fcnisbacon.wordpress.com/ Marty

    I suggest those proponents of binging high-tech/industrial jobs to Fremont take a drive up and down Fremont west. Start at the wasteland south of Stevenson, up Cherry, then north on Paseo. The amount of vacant land is enough to satisfy any utopian vision of industry, “greentech” or otherwise.

    Then look at the amount of vacant office/R&D/warehouse and light manufacturing real estate on this route that is just sitting there vacant -especially the structures across from Coyote Hills. Take a good look at the vacant “Pacific Research Center” that occupies the former Sun campus.

    If after this exercise one still believes there is or ever was an imperative to use the vacant NUMMI site for industrial development, then that person has no business serving on the city council.

    I give Bacon half a pass, because I think his positions are at least based on an idealism that rests somewhere between unobtainable and fantasy. But, at least he believes in what he’s spinning.

    Kathy McDonald on the other hand is a selfish NIMBY, pure and simple. I think her motivation to oppose the A’s development (and subsequent formation of the FCN) relied heavily on her desire to keep her Mission Hills home and elementary school well segregated from the bustle of greater Fremont.

  • VOR

    “ability to continue as a going concern” is statement that applies to more than just Solyndra, i.e., our cities, counties and maybe even our state. What I am curious about is how Solyndra managed to qualify for such a huge chunk o’ money from the fed without due diligence?

    Marty is correct about commercial real estate; before NUMMI closed Fremont had 5.2 million sq. ft. of vacant buildings. After NUMMI that has doubled to 10.5 million.

    Here’s an idea. What if we turn it all into farmland? You know, like it used to be. That’s what Detroit is doing.

  • John W

    March 2009: $535 million loan facility guaranteed by the U.S. Department of Energy. … “DOE, in consultation with independent consultants, performed a thorough investigation and analysis of our project’s financial, technical and legal strengths,” said Dr. Kelly Truman, Solyndra’s Vice President of Marketing, Sales and Business Development. … “We are proud to be the first company to pass this comprehensive review, and we would like to acknowledge the exceptional efforts of the staff of the DOE Loan Guarantee Program Office.”

    Goldman, Sachs & Co. acted as exclusive financial advisor to Solyndra in connection with this loan guarantee application.

  • bbox231

    RE the higher purchase price of Solyndra product -

    The unique nature of Solyndra’s tubular array significantly results in a higher manufacturing cost when compared to other traditional flat-panel arrays . . . . but, very importantly also produces some other benefits.

    Installations of the Solyndra product occur with significantly reduced cosmetic impact (e.g., they can be mounted parallel to the roof line unlike the raised installations typically found with flat-panel installations). They also deliver a reduced likelihood of wind-damage to the array OR the facility it is installed on owing to drastically reduced wind loading .

    So – a proper assessment of the Solyndra strengths and weaknesses might trade-off the higher cost of manufacturing against a reduced TCO (total cost of ownership).

    Re the warnings of auditors -

    In part, as a response to the historical UNDER-REPORTING of investment risks, audit agencies have more recently responded by overtly emphasizing the riskiness of (in addition to other considerations) emerging technologies. It is NOT the auditors responsibility to make investors aware of prospective opportunity – - – only prospective risk.

    (Why aren’t the supposedly pro-Fremont factions making THESE points understood ??????)

    Re more important stuff -

    The Three Stooges consisting of Fred, the Freemont City Council and their Athletic’s supporters continue to fan the flames of economic uncertainty in hopes of herding residents to the troff of their pet project . . . seemingly, absent any other creative thought.

    Meanwhile, other communities are busy SLOWLY growing their base of businesses and working with emerging businesses to bring opportunity to their communities. . . . none of which (including the proposed stadium) is absent potential risk.

    Instead, Freemont stadium proponents are busy trying to sell residents on the complete absence of “other” opportunities, the uncertainty of the stormy seas ahead. Times are tough, Solyndra may fail, NUMMI is gone – - – what will we do, what will we do ??? (Lions and tigers and bears, OH MY !)

    While we continue to slather negative generalizations about our future demise, other communities are busy SLOWLY rebuilding a base of businesses- NOW – TODAY – . . .. . and, yes, some will fail – - but, many of which will survive. Again, risk and uncertainty reign supreme !

    And speaking of uncertainty – As Marty suggests, maybe McDonald or Vinnie are no better than our current incumbants, maybe in a few years – Centerville is still sitting idle; MAYBE we still cant forecast tax revenues accurately from year to year; and maybe we still haven’t figured out how to bill a residential alarm the same way we bill for an illegal right turn . . . . but all of that is speculative – ISN’T IT ??

    There is, however, one set of certainties – - – all that are undeniable.

    Those certainties are the results and contributions and achievements of your Mayor, City Manager, and City Council members – - – whatever those facts, they stand visible for all to consider as a reality and are not a matter of speculation.

    As you consider how you will vote in this upcoming election. Those facts should weigh highly in your assessment.

  • kevin

    If city sell the NUMMI site for $1 or for free just like what they are trying to do for the builders or A’s, I believe there will be bunch of High Tech companies waiting in the line to move their office to Fremont.

  • http://fcnisbacon.wordpress.com/ Marty

    It’s almost funny how much of a criminal organization Goldman Sachs is. Almost.

    Box, you make some points worth considering, but me thinks Solyndra, with the help of some GS planners pulled the wool over the eyes of an Obama administration eager to get something “green collar” out there quick.

    Thank goodness Obama only tossed half a billion at this one. We could have lost some real money.

    Some more fun reading on the Goldman way (enjoy with some brittle drywall, your fist will thank you) -
    http://www.nytimes.com/2010/02/14/business/global/14debt.html

  • VOR

    Like I said, if we really want to be green let’s grow things. Ironic that we used to be real green, then we paved over everything and now we’re trying to be green again, but in a different way.

    Speaking of green, imagine how much pot could be grown inside the NUMMI facility if it became a legal industry! Train loads shipping out daily!

  • VOR

    Here’s another heart warming story of greed in America as a side dish to Marty’s link in #8.

    http://www.rollingstone.com/politics/story/32906678/looting_main_street/print

  • Charlotte Allen

    Here’s a story about another software company moving to Pleasanton: http://www.insidebayarea.com/search/ci_14831678

    Seems Pleasanton has been successful in developing its own high-tech corridor. I wonder if their growth limits had anything to do with their commercial success.

  • Bruce

    BBox is right about Solyndra making cells that are cheaper to install than standard panels. They don’t require solar trackers, compare this to the motorized trackers on the solar farm at the courthouse. Beyond that I don’t know the economics, but there is a reason they build them this way. Don’t write them off based on the auditor’s report.

  • Small_Business_Owner

    As noted above, 10+ million sq ft of over supplied empty industrial space, which means no more construction needed, which means less profit for developers, which means Fred, Mayor, and current city leadership need to stimulate “contruction” at any price, including giving away our precious Fremont land for free to out-of-town billionaire to build the stadium. This is done in part through loopholes in redevelopment fund (which resemble off-the book accouting that got us into recent financial disasters) and etc. The public justifications of jobs, catalyst, etc etc are just hype, myth, and smokescreen for putting money into developer pocket. Quantifiable costs such as public services, declined home values, etc in association with “construction” are ignored. Unquantifiable costs such as quality of life, social ills associated with big city development are shoved aside.

    As for business development, let’s don’t forget that Fred, Mayor, and co. grew up in and benefited from the world of bureaucratic complexity, union protection, and antiquate “way of doing business”. That’s why they are so focused on the WOW stadium project while ignoring other sectors of our local economy. This unbalanced development attitude is hurting the community and raises the cost of doing business. First, it killed our manufacturing competitiveness. Now it is killing our service businesses as well. It is well known that starting small businesses in Fremont is more challenging and costly compared to other cities.

    Let’s hope Vinnie, Kathy, or whoever can change this status quo. Who knows, if elected, they might support Solyndra and other manufacturers by giving away free land (as suggested by Kevin above) and provide assistance and incentive to small businesses as much as the stadium project is receiving.