Solar Millennium Files For Insolvency

Date : 12/22/2011 @ 8:05AM
Source : Dow Jones News
Stock : First Solar, Inc. (MM) (FSLR)
Quote : 36.47  0.0 (0.00%) @ 4:04AM

Solar Millennium Files For Insolvency

First Solar, Inc. (MM) (NASDAQ:FSLR)
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German solar-power developer Solar Millennium AG (S2M.XE) said Wednesday it has filed for insolvency after it was unable to sell four U.S. solar-power projects, in the second such filing by a German solar firm in a week.

Solar Millennium, of Erlangen, said in October it planned to sell the U.S. solar-power plants--one of which turned down a $2.1 billion federal loan guarantee--to German developer solarhybrid AG (SHL.XE). But Solar Millennium was unable to meet "certain conditions" to complete the deal, such as a binding confirmation of the amount and time of cash flows, the company said in a statement on its website.

"The Management Board and the Supervisory Board deeply regret this development," the company said in the statement.

A telephone call to Solar Millennium was not returned.

Solar Millennium's troubles are the latest in a wave of solar-company bankruptcies and restructurings amid growing pressure from sliding prices of solar panels, a rival technology. Weak solar-power demand in Europe and an oversupply of solar panels from Asia have hurt solar-panel manufacturers and their rivals, while giving a huge competitive edge to developers who use solar panels to build power plants.

Solar Millennium's insolvency filing follows a similar filing last week by German solar-panel maker Solon SE (SOO1.XE) and U.S. solar-panel maker Solyndra Inc.'s spectacular September bankruptcy after the company spent more than $500 million in government loans.

Other bankrupt solar firms include Stirling Energy Systems Inc., Evergreen Solar and SpectraWatt.

Solar Millennium had formed a joint venture with German industrial developer Ferrostaal AG, called Solar Trust of America, to build four large solar-thermal power plants using Solar Millennium's parabolic trough technology. The company obtained federal and state construction permits to build a 1,000-megawatt solar power plant in California, called Blythe Solar, and snagged a $2.1 billion loan guarantee from the Department of Energy to help finance the project.

Parabolic trough technology involves mounting thousands of curved mirrors on the ground to collect and concentrate heat from the sun onto tubes containing fluid that heat up and produce steam to drive power turbines. Solar panels, by contrast, use solar cells made from silicon or other materials, to convert sunlight into electricity.

In August, as global solar-panel prices plunged, Solar Millennium said it would switch technologies at the Blythe plant and the three other plants, from the company's parabolic troughs to much cheaper solar panels. The technology switch meant the company couldn't use the loan guarantee.

Solarhybrid, which develops solar-panel projects, said in November that it hoped to partner with U.S. solar-panel maker First Solar Inc. (FSLR) on the Solar Millennium projects. First Solar has declined to comment.

Solar Millennium had a long-term contract with Edison International's (EIX) Southern California Edison utility to sell the electricity from the Blythe solar plant.

A spokeswoman for SoCal Edison said the contract was still active.

-By Cassandra Sweet, Dow Jones Newswires; 415-439-6468; cassandra.sweet@dowjones.com

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