LOWELL, MASS. (June 8, 12:30 p.m. ET) — Despite the rapid growth of the solar energy industry, solar panel developer Konarka Technologies Inc. is closing its doors. It announced June 1 that it had filed for bankruptcy protection as it undergoes Chapter 7 liquidation.
The Lowell, Mass., company had raised more than $150 million in private funding and $20 million in government grants. In mid-May it announced that its lightweight, flexible organic solar film that converts light to electricity would be used as part of Dri-Design metal rain-screen panels for building façade applications.
In September 2011, Konarka said it was working with ThyssenKrupp Steel Europe AG to develop steel roofs with integrated photovoltaics.
But Konarka Chairman, President and CEO Howard Berke said in the firm's latest statement: “Konarka has been unable to obtain additional financing, and given its current financial condition, it is unable to continue operations.”
Under the Chapter 7 proceedings, a trustee will be appointed to liquidate assets for the benefit of Konarka's creditors, the company said. It said several large companies, as well as the Chinese government, had expressed interest in acquiring or financing the firm. Now it is up to the court and the trustee to decide.
The filing comes at time when the Solar Energy Industries Association said that 2011 was a historic year with 1,855 megawatts of U.S. photovoltaic installations — 109 percent growth over 2010.
The trade group's communications director, Jarod Blanton, said installations are booming, but at the same time, manufacturers are being challenged by rapidly falling prices. The group said the average cost of a photovoltaic system has dropped by more 35 percent since early 2010 and that's straining solar makers worldwide.
Last month, the Department of Commerce said it had made a preliminary determination that Chinese producers/exporters sold solar cells in the U.S. at dumping margins of between 31 percent and 249 percent. A final determination is set for October.
Konarka was founded by Berke and Alan Heeger — a Nobel Prize winner in 2000 for his work in conductive polymers. Among the company's assets are hundreds of owned and leased patents, patent applications and a manufacturing site in New Bedford. The company reportedly had about 80 employees.
Meanwhile, the closing has developed as a political issue. Republican presidential candidate Mitt Romney has criticized President Obama for the federal goverment's $535 million in loans to Solyndra, which went into bankruptcy last year. Now that Konarka has shut down, Democrats are stressing that when Romney was governor of Massaschusetts, his administration loaned $1.5 million to Konarka.