US domestic solar company SunPower has announced that it has breached a credit agreement, sparking concerns over its ability to stay in business.
In a regulatory filing, the company said the breach of the credit agreement had enabled the firms that had lent SunPower money for its projects to demand the immediate repayment of US$65.3 million or exercise other remedies, after the company failed to submit its third quarter financial results on time.
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SunPower said it did not have the ability to borrow from the remaining capacity of US$53.7 million of revolving commitments as a result of the filing, but it had obtained a temporary waiver until 19 January 2024.
However, the company said: “Although we entered into the amendment and waiver to temporarily address the existing defaults, we are also projecting to be non-compliant with certain debt covenants, which would cause further defaults under our existing debt arrangements.”
SunPower is also seeking additional waivers and evaluating various funding alternatives, but the company noted that “there can be no assurance that such financing would be available”. If the company were to struggle to generate new sources of funding, there would be considerable doubt over SunPower’s ability to continue to operate.
In addition to the latest breach, SunPower has already lowered its FY2023 guidance due to reduced consumer demand and delayed revenue recognition from longer cycle times in November. It reduced its guidance on net loss for this year toUS$165-175 million. Sunpower also reduced its residential customer forecasts to up to 80,000 this year, down from the previous estimates of up to 90,000.
The company posted a net loss of US$32 million in Q3 2023, down from net income of US$138.4 million in Q3 2022 and a net loss of US$30.3 million in Q2 2023.
Moreover, solar manufacturer Maxeon Solar Technologies – which split from residential solar company SunPower in 2020 to take on its manufacturing business – announced that it would lay off about 22% of its global workforce as it decided to phase out its Maxeon 6 interdigitated back contact (IBC) modules as well as other operational realignments.
Enphase Energy lays off 10% of workforce
Meanwhile, US microinverter supplier Enphase Energy announced that it will reduce its global workforce by about 10%, including about 350 contractors and employees, as the company aimed to reduce operating costs, and better align its workforce and cost structure with “current market conditions”.
In addition, the company will cease operations at its contract manufacturing locations in Timisoara, Romania and Wisconsin, US, as it looks to resize other contract manufacturing sites. The company will focus on manufacturing microinverters in the US, with two existing contract manufacturing partners in South Carolina and Texas.
Enphase Energy’s global capacity will be reduced to about 7.25 million microinverters per quarter after the rearrangement of business.
In a letter to the company’s employees, Badri Kothandaraman, CEO and president of Enphase Energy, said: “Over the last 12 months, the solar market has seen a lot of turbulence worldwide. In the US, high interest rates have caused a significant drop in consumer demand, while California’s NEM 3.0 transition continues to create further uncertainty. We saw tremendous growth in Europe until the middle of 2023, when demand slowed, and interest rates led to high inventory levels.”
The restructuring plan is expected to be completed by the first half of 2024.