On a roll: Thin-film PV firm Solyndra gets DOE loan, then President Obama’s attention

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Tom Cheyney

Tom Cheyney is former senior editor of PV-Tech / Photovoltaics International magazine. A veteran technology journalist / editor / blogger, he covered the semiconductor, microelectronics and solar sectors for many years - since fax machines were state of the art. His PV-Tech blog has become a must-read for industry insiders and observers. He was also chief editor of "The Rise of Thin-Film Solar Technology" book published in early 2010.

Solyndra, the company with those unusual cylindrical CIGS thin-film PV modules, is on a bit of a roll. Late last week, the solar manufacturer received word that it had received a U.S. Department of Energy loan guarantee, to the tune of $535 million, monies it will use to expand its Northern California manufacturing base.

Then today (March 23), in a meeting of clean energy company execs and investors in the Eisenhower Executive Office Building next door to the White House, President Barack Obama addressed the group, telling them that "innovators like you are creating the jobs that will foster our recovery and creating the technologies that will power our long-term prosperity."

Whether the U.S. chief executive was looking directly at Solyndra's chief executive Chris Gronet (who was among the invitees) when he said those words has not been confirmed.

But the message is clear: this U.S. president's administration is serious about helping solar and other renewable energy sectors become world market and technology leaders. The combined $59 billion in funds and tax incentives designated for green energy efforts in the new stimulus bill (which includes at least $1.2 billion in new science funding announced today) represents what Pres. Obama calls a "historic effort" (his words) in the country's efforts to wean itself off the teat of foreign oil dependency and eco-unfriendly fuels (my words).

After seeing the announcement about the DOE loan guarantee, I reached out to Mike Grunow, Solyndra's senior VP of marketing, in hopes of finding out additional details about the loan and what the company planned to do with the funds, as well as getting an update on the TFPV firm's progress in general. With the firm's execs scattered in Europe and, as it turns out, Washington, DC, it took Mike awhile to get back to me, but this morning he sent me an email with their replies.

"We are the first company to receive an offer under this administration," he confirmed, "and we are the first of the remaining original 2005 applicants for the loan guarantees under Title XVII of the Energy Policy Act of 2005."

He said that the next step in the "transactions" taking place will be when DOE and Solyndra "draft the definitive documentation that describes the agreement in full detail.  Upon completion of definitive documentation, Solyndra must satisfy DOE that certain 'conditions precedent' have been met, at which time the transaction will be finalized."

He did not elaborate on how long the process with DOE is expected to take or when the transaction will be/might be completed.

Since the loan is expected to cover 73% of the Fab 2 project cost expenses, I wondered where the other 27% will come from. "Solyndra’s equity commitment to the Fab 2 project represents the other 27%." he replied. "We cannot comment on the company’s sources of equity capital, but we are fortunate to have an excellent, supportive group of current investors and have earned the respect of a broad base of other investors."

Solyndra's list of known investors reads like a who's who of cleantech funds and greentech promoters, including Madrone, Masdar, Virgin, Rockport, Redpoint, USVP, and CMEA. No word on when that "respect" bestowed by those as-yet anonymous "other investors" might turn into more sources of actual funding for Solyndra though.

I asked him about the construction/ramp timeline for Fab 2. Although he didn't get too granular in his reply, Grunow did say that the company expects the new fab "to be in production in early 2011." He also told Greentech Media that construction on the second factory--which will take place in what is now an open field just a few hundred meters up Kato Road from Solyndra's Fab 1 front-end tubular module-making facility in Fremont--should begin by the end of this year.

Grunow also clarified something in the press release that caught my eye--a claim of 500-MW annual nameplate capacity for Fab 2, once it's fully ramped. Since Solyndra VP Kelly Truman had told me in October that the second factory's full capacity would be 420 MW--made up, cookie-cutter style, of six 70-MW "copy exact" production lines--I wondered what had changed, apparently for the better.

"The plant was designed to hit a minimum of 420 MW, based on conservative estimates for average panel power and yield made over one year ago," Grunow said.  "As we've ramped our first plant, we've exceeded our plan and now believe we can easily achieve higher output with the same capital infrastructure currently proposed for Fab 2." As for the tech transfer from the first to second fab, "Fab 2 is essentially copy exact from the its Fab 1 tool designs," he added.

Another change will come into play with the back-end of Solyndra's copper-indium-gallium-(di)selenide production process, where the tubular modules are packaged, put through final testing, slotted into panel frames, and readied for shipment to their channel partners.

With the current arrangement, the tubes are first processed in Fab 1 and then sent down the road to the company's back-end assembly/test house in Milpitas. The new fab "will have its own dedicated back-end facilities," according to Grunow, which means Fab 2 will be essentially an integrated PV production factory.

Solyndra continues its reticent ways on certain lines of questioning, declining to provide details about shipment volumes of its finished panels or its current installed base/deployments (we know that the company already has about $1.5 billion of bookings in its pipeline, just not how much is out there so far), the operational performance of Fab 1 (which features two production lines), the company's exact headcount (other than to say "more than 500 employees"), or the status of its upstream supply chain vendors during these times of economic travails.

Grunow did say that "demand for our product remains high and sales solid," and that the company is "hiring new employees to address the requirements of its continued growth and will have additional hiring for the Fab 2 project."

The press release put more specific numbers on those new-hire plans. Solyndra said it believes that the construction of Fab 2 will employ about 3000 people and that the facility operations will create more than 1000 jobs, with "hundreds of additional jobs" created to help with the installation of Solyndra PV systems on commercial and industrial rooftops, just in the U.S.

Those are precisely the kind of recovery-fostering, prosperity-powering jobs that Pres. Obama has in mind for his vision of a clean technology economy for the U.S. in the 21st century.

While the DOE loan represents a big step forward for Solyndra, providing needed capital to help it expand and ultimately succeed in the marketplace, the devil's now in the game-plan execution details as the upstart CIGS player tries to keep its eye on the ball.