For the solar energy industry, it seems like the bad news just keeps on coming. The latest company to fall victim to this downturn is Auburn Hills, Mich.-based Energy Conversion Devices (ECD), which filed for bankruptcy protection on Tuesday, February 15.
The news is disheartening but not exactly surprising. Last year’s Energy Boom Clean 100 Index highlighted ECD in the number two position of 10 worst-performing companies. The only solar company with a more disappointing record was Canada Lithium.
Taking its two subsidiaries (United Solar Ovonic LLC, or USO, and Solar Integrated Technologies, or SIT) with it in the race to the bottom, ECD nonetheless did some seriously heavy lifting during its career. One example of that would be its cooperative venture with Soprema, when ECD subsidiary UNI-SOLAR completed one of the largest rooftop installations in France.
Fortunately for workers at its battery division, Ovonic Battery Co., ECD had already sold this unit to BASF Corporation, for $58 million in cash.
ECD had closed its manufacturing facility back in November of last year with an eye to restructuring and emerging stronger. At that time, according to company spokespeople, the shutdown was billed as an ‘inventory control measure.’ The move was meant to create an interval during which the company could seek funding.
This move also idled about 400 manufacturing associates across the country and into Mexico and Canada, and was expected to reduce the workforce by approximately another 500 full-time ‘associates’ who were participating in the Open Solar Initiative through another ECD subsidiary, United Solar – also placed under Chapter 11 protection on Feb. 15.
United Solar will remain open for business as it develops advanced nano-crystalline silicon photovoltaics. Another division of the company, Ovonyx Inc. (high-performance semiconductors), is also for sale.
ECD’s bankruptcy highlights a trend in the industry, one which many see as the result of Chinese manufacturers flooding the marketplace with a glut of solar products. Preceding ECD into bankruptcy are Solyndra, Evergreen Solar, SpectraWatt, and Solar Millennium (another German firm), all presumably as a result of the aforementioned trade war with China which resulted in SolarWorld (a German firm) and six other companies filing a trade complaint.
The U.S. Commerce Department has not made a decision on the complaint yet, but did rule on January 27 that enough evidence exists to support SolarWorld’s claim. If a decision in favor of SolarWorld follows the Jan. 27 rule, Chinese manufacturers could be assessed countervailing duties; that is, import taxes retroactive to 90 days. A decision is expected March 5.
Not all in the solar energy industry are in favor of taxes, or tariffs, on Chinese solar products. In fact, according to a report by the Brattle Group, tariffs could result in the loss of as many as 50,000 U.S. jobs over the next three years.
Any opinion contained in this article is solely that of the writers, and does not necessarily shape or reflect the editorial opinions of Energy Boom. Energy Boom content is for informational purposes only and is not intended to be advice regarding the investment merits of, or a recommendation regarding the purchase or sale of, any security identified on, or linked through, this site.