Satcon sets restructuring path that sheds 35% of workforce: folding Solstice product line

Share on facebook
Share on twitter
Share on linkedin
Share on reddit
Share on email

PV inverter supplier, Satcon Technology is realigning its business operations and significantly cutting operating expenses to reach breakeven mid-year. The company said it would focus on the commercial and utility solar markets concentrating particularly on North America, China, India and Thailand, as well as other emerging markets in the Asia-Pacific region. Europe and Canada business efforts are being scaled back, which includes the closure of its manufacturing facility in Ontario, Canada and an overall headcount reduction of 140 worldwide, or approximately 35%. Satcon will also stop production of its Solstice product line due to challenges in production cost reductions needed to be cost competitive.

“The worldwide solar market conditions in 2011 demonstrated the dynamic nature of this maturing industry,” commented Steve Rhoades, Satcon’s president and chief executive officer. “The compounding effects of reduced panel costs and market demand shifts toward North America and Asia have forced the entire industry to adjust as we enter the next phase of development. Decreasing prices, however, present significant opportunity for Satcon, where the demand for our large-scale inverter solutions nearly doubled in North America and Asia year-over-year. The measures we have announced today will help to ensure that Satcon achieves the financial strength required to profitably maintain our leadership position as the standard for large scale inverter systems as solar power generation becomes a more affordable and stronger investment worldwide.”

Satcon management said in a conference that the closure of its Canadian manufacturing facility was due to an insufficient market growth to support a dedicated facility. It intends to meet local content rules for customers via a sub-contract arrangement that should be completed and announced in about a month.

Weaker-than-expected demand for its PV inverters in Europe in 2011, compared to the previous year, has resulted in restructuring its office and warehouse infrastructure in Europe, which is now not expected to be a market or product development focus for Satcon in the future.

Satcon’s Steve Rhoades also noted in the call that although it’s Solstice distributed energy management system had been in high-demand and had been a technical success, it would be stopping production as the company concluded that it could not offer the product at a cost competitive price, close to rival offerings. Costs were said to be too high to deliver to customers profitably.

Charges of approximately US$2.8 million to US$3.0 million have been attributed to the factory closure, with the majority of the charges expected to occur in the fourth quarter of 2011, with the remainder taking place in the first quarter of 2012. The company expects ongoing savings of approximately US$15 million to US$17 million annually after the cost cutting program has been implemented.

In addition to the restructuring charges, the company is currently analyzing its inventory and certain non-cancellable supplier-held inventory, which is expected to result in charges during the fourth quarter of 2011 of approximately US$20 million to US$26 million, with the majority of the charges as non-cash items. Though the company said it was currently trading at just below its previous guidance for the fourth quarter of 2011, the charges were not anticipated and therefore not included in guidance. Management noted that pricing had actually stabilized in recent weeks.

“These spending reductions, coupled with our accelerated cost reduction programs, significantly lower our breakeven level during the first half of 2012,” added Aaron Gomolak, Satcon’s chief financial officer.

26 January 2022
Join this free webinar for our analysis of the growth of N-Type technology including; new capacity expansions and production output. We'll also be looking at the global manufacturing footprint with forecasts on how much product will be made outside of China this year and which companies are driving technology change across the crystalline silicon value chain.
23 February 2022
Held annually since 2016, the Energy Storage Summit Europe is the place to be for senior stakeholders in the European storage industry. Designed to accelerate deployment of storage, we examine evolving chemistries, business models, project design, revenue stacks and use cases for storage. The 2022 edition will include exclusive content around longer duration solutions, energy strategies for wide-scale deployment of EVs and "EnTech", the event which sits at the intersection of digitisation, decentralisation and decarbonation of the power system. Come to meet TSOs, DSOs, Utilities, Developers, Investors and Lenders and leave with new contacts, partners and a wealth of information.
7 March 2022
Take your chance to join the most powerful platform in the MENA region. Middle East Energy (MEE), Intersolar, and ees, the leading energy exhibitions are joining hands to co-deliver an outstanding renewables and energy storage event at Middle East Energy 2021. Renewables and energy storage at MEE is the largest gathering of solar and renewable energy industry professionals in the Middle East & Africa, offering the most effective trade focused platform to international manufacturers and distributors looking to meet regional buyers.
8 March 2022
As Solar Finance & Investment enters its ninth year, we sit on the cusp of a new power market with solar at its heart. The 2022 edition of the event will build on our years of expertise and relationships to bring investors and lenders together with top developers. Connect with leaders in the field and use exclusive insights to drive investment and development decisions for the future. Meet new and existing project partners at the largest gathering of European solar investors and lenders.
23 March 2022
When it comes to storage, the US market exceeded a gigawatt of advanced energy storage installations (weighted towards lithium ion) at 1.46 GW, more than the previous six years in total! An exponential growth rate could see the market hit 7.5 GW p.a. by 2025. The summit will provide a wealth of content around this vital piece in the US power puzzle, with sessions dedicated to explore how companies are making money from batteries, the latest chemistries and their applications as they apply to different use-cases. We ask how investors can match ESG criteria to batteries and we will bring case studies of successful deployment and project execution onto the stage to examine how you can ensure your own projects are successful.
29 March 2022
Now in its 10th sell-out year, Large Scale Solar returns to Lisbon in 2022. We are excited to gather together face-to-face with the European solar industry as we provide unique and exclusive access to a powerful selection of the market's key stakeholders. Join this elite summit to find out how the market is maturing, which new markets are becoming more exciting, how technology is evolving and who's driving the market forward into the 2020s. Always senior, packed with developers, EPCs, utilities and investors this is the event for companies serious about European solar PV.

Read Next

January 21, 2022
Toronto-based renewables developer Amp Energy has closed on a US$350 million credit facility to advance on a global portfolio of renewables and battery energy storage assets.
January 21, 2022
India is at risk of a supply and demand mismatch for solar equipment if domestic PV manufacturers are unable to meet the quantity and quality required by project developers, Fitch Solutions has warned.
January 21, 2022
The European Commission has launched a public consultation on solar energy on the continent as it continues preparations to publish its solar strategy later this year.
January 21, 2022
US solar installer SunPower is to be hit by a cracking issue discovered in connectors associated with equipment installed in some commercial and industrial (C&I) projects, resulting in charges of around US$31 million.
PV Tech Premium
January 21, 2022
Greece is on track to accelerate solar deployment in the coming years, with the sector boosted by rising demand for renewable offtake agreements from corporations and clean energy policies from the EU, according to the general manager of Greek industrial group Mytilineos’s renewables business.
January 20, 2022
Mississippi authorities have expanded the state’s net metering programme to improve total compensation rates for solar customers and prioritise the adoption of distributed PV for low- to moderate-income (LMI) households.

Subscribe to Newsletter

Upcoming Events

Upcoming Webinars
January 26, 2022
Free Webinar
Solar Media Events
February 23, 2022
London, UK
Solar Media Events
March 8, 2022
London, UK
Solar Media Events
March 23, 2022
Austin, Texas, USA
Solar Media Events
March 29, 2022
Lisbon, Portugal