SpectraWatt Inc, a closely held maker of solar products backed by units of Intel Corp and Goldman Sachs Group Inc, filed for Chapter 11 bankruptcy protection, the second US solar firm to do so this month as panel prices fall.
SpectraWatt owes creditors US$38.7 million and is planning to auction almost all of its assets, which the Hopewell Junction, New York-based company valued at US$33.9 million in a filing with the US Bankruptcy Court in Poughkeepsie, New York.
The company said it was forced to seek protection from creditors because of increasing competition from Chinese rivals and deteriorating prices in the solar industry, according to the filing on Friday. Evergreen Solar Inc cited similar reasons for its bankruptcy filing on Monday last week.
“United States-based manufacturers are under a great deal of stress because of the emergence of manufacturers in China, who receive considerable government and financial support,” SpectraWatt’s chief restructuring officer and CEO Brad Walker said in the filing. “This support, coupled with China’s inexpensive production costs, have created a competitive advantage for Chinese manufacturers and allowed them to become price leaders within the industry.”
SpectraWatt had a “non-competitive production line based in the US, without means to reduce that cost,” Edwin Mok, an analyst for Needham & Co, said in an e-mail on Tuesday.
As solar prices fell, the company was “stuck in a situation where there was nothing else they could do,” Mok wrote.
Both SpectraWatt and Evergreen have technology that is “not competitive and there was no method to reduce cost to make it competitive with Asian manufacturers,” he said.
Prices for multi-crystalline silicon modules dropped 13 percent from last month to US$1.37 a watt, according to Bloomberg New Energy Finance’s monthly spot survey.
SpectraWatt shut down its Hopewell Junction manufacturing plant in April, dismissing all 117 workers. It relocated its headquarters there in 2009 from Hillsboro, Oregon.
The solar cell maker also said it had received defective manufacturing equipment and silicon wafers from vendors, forcing it to sell finished products at reduced prices that led to losses, according to the filing.
The company has received interest from foreign buyers, although it has not secured a lead bidder for the planned auction because the potential buyers aren’t familiar with US bankruptcy policies, it said. SpectraWatt wants to hold the auction on Sept. 28, before the market is inundated with equipment from other failing solar companies.
“Within the next three to six months, there is a high likelihood that a significant amount of used solar cell manufacturing equipment and related assets will flood the market and drive down the value of the debtor’s assets,” Walker said in the filing.