Wednesday, November 21, 2012

Green Businesses Going Bankrupt

Although environmentally-conscious people have been attempting to raise awareness for decades, the ever-popular movement to “Go Green” has only begun to gain attention from the general public in recent years. From conserving water and electricity to recycling plastic and cans to purchasing products that contain natural ingredients versus harmful ones, more and more citizens are making a conscious effort to make a difference.

As always, when something becomes trendy, more and more people want to be a part of it.


Entrepreneurs quickly realized that going green for the planet also offered the possibility of adding green to their bank accounts. Multiple green businesses manufacturing earth-friendly products like solar panels—an alternative energy source—began sprouting up in states across the country, from Colorado to California.  

Solar Energy Companies 
One such green business in Colorado was Abound Solar, a manufacturer of cadmium telluride thin-film photovoltaic modules used to convert sunlight into electricity. Abound is often compared to Solyndra, a green company based in Fremont, California that also manufactured thin-film solar cells.

It initially appeared that companies like Abound and Solyndra were going green and going strong. After all, the idea of finding a natural alternative to coal is an exciting one! The government thinks solar energy is a good idea, too.  

Businesses Borrowing Green to Go Green
Maybe it’s more accurate to say that the government thought solar energy was a good idea.

Solyndra received a $25.1 million tax break from California’s Alternative Energy and Advanced Transportation Financing Authority, the majority of which came from the Energy Policy Act of 2005. Abound received a $400 million loan from the U.S. government in 2010. Then Solyndra declared bankruptcy in February 2012. Abound did the same in June 2012 after it laid off roughly 125 workers.

Jaws dropped, and DenverPost.com reported that angry Republicans had launched an attack on the Obama administration and how they handled federal loan guarantees for Abound and other green Colorado businesses. Some even went as far as claiming that Abound knowingly sold defective panels, which were essentially manufactured with government dollars. Abound and other companies claim that they could no longer compete with Chinese competitors.

Ironically, all of this bad press has given the now-defunct green businesses more attention after filing for bankruptcy than they had while they were still in business.  
Green Businesses Causing Taxpayers to Lose Green
Solyndra and Abound Solar were not the only greenbusinesses to receive government assistance, and unfortunately, they were not the only ones to file bankruptcy or appear to be heading in that direction. Others include:
  • Evergreen Solar
  • SpectraWatt
  • Beacon Power
  • Nevada Geothermal
  • SunPower
  • First Solar
  • Babcock and Brown
  • EnerDel’s subsidiary Ener1
  • Amonix
Some people remain optimistic for green businesses despite the Colorado situation and other green business bankruptcies. “For this to become a political issue is ridiculous. Every business startup goes through a metamorphosis. Unfortunately, some fail. But renewable energy should be a bipartisan initiative,” Claudine Schneider of Boulder, Colorado—a Republican and former five-term congresswoman from Rhode Island—told DenverPost.com.

This article was guest written by Jon Reiter.  He is a marketing agent for www.jonbclarke.com/ an experienced Denver bankruptcy attorney.

1 comment:

Sabrina Garza said...

“But renewable energy should be a bipartisan initiative,” – Much agreed. Saving Earth is quite different from saving your business. A company’s failure doesn’t have to stop and consequently affect the main principle of going green. It’s totally an isolated case.

- Sabrina Garza