Phone numbers are no longer working and offices are empty at SoloPower facilities in Oregon and California, according to The Oregonian, and lawsuits are stacking up in both states from vendors and even a former president who say they haven’t been paid.
Yet the state of Oregon is renegotiating deals and extending deadlines in hopes the company can find capital and repay the state.
Oregon made a big investment in the solar panel startup, with millions in loans and tax breaks, and officials defend the restructuring agreement as the best chance to recoup some of that cost. Keeping the company out of bankruptcy court will save legal expenses, they told the newspaper, but unsecured creditors complain the move limits their options.
Oregon wasn’t alone in seeing great promise in SoloPower’s plans to develop and manufacture thin film solar panels that could be used on roofs where conventional panels would be too heavy. SoloPower gained incentives of $10 million from the state’s energy department, $5 million in loan guarantees from the city of Portland and $20 million in tax credits from the Oregon Business Development Department, which it sold to gain $13.5 million in cash, according to The Oregonian. It also gained agreement for $197 million in loans from the federal government for future growth.
But the promising market didn’t materialize, buffeted by foreign competition and falling prices, and analysts say chances for recovery are small. Investors, employees and vendors are big losers along with taxpayers.
It’s a reminder, like the Solyndra case in California, of the risks of government trying to decide who succeeds in the marketplace, with too much influence from political enthusiasm for green energy and not enough attention to the risks to taxpayers.
Oregon officials who decided to stick with SoloPower at this stage may have good reason, with little more to lose and at least a small hope the company can recover. They need to carefully study, however, how they chose to make the investment in the first place, to guide them away from such risky ventures in the future.