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Green Crap: Another Solar Subsidy Business Goes Bust

October 23, 2017
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By Paul Homewood

 

Another solar company goes tits up!

 

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A green energy company heavily incentivized by Mississippi is shutting down, raising questions about whether the state will get repaid. It’s the fourth green subsidy company to go bust recently.

Solar panel maker Stion notified the state Tuesday that it would close its Hattiesburg plant Dec. 13, laying off 137 employees.

“Intense, non-market competition from foreign solar panel manufacturers, especially those based in China and proxy countries, has severely impacted the viability of our business,” the San Jose, California, company said in a statement released by spokesman Frank Yang.

Stion is the fourth green energy deal made by former Gov. Haley Barbour to flop. Earlier, solar equipment maker Twin Creeks and biofuel maker KiOR went out of business. Electric car maker GreenTech Automotive has ceased production. Mississippi’s state government is owed at least $92 million by those companies.

Mississippi initially loaned Stion $74.8 million, and state and local governments have given millions more in other tax breaks and subsidies. The company, for example, owes more than $2.1 million in property tax payments, even though tax rates on the plant are two-thirds lower than normal. Stion agreed to start paying down those bills in May, but Forrest County Attorney David Miller said Stion only made three $75,000-a-month payments. […]

Stion raised more than $200 million from private investors, in addition to Mississippi’s loan. It promised 1,000 jobs in Hattiesburg when it announced its plans in 2011. But the company was already struggling in 2013 when venture capital firm Khosla Ventures took a controlling interest. That’s the same company that was the lead investor in KiOR, whose biofuel failure sparked an ongoing lawsuit by Mississippi Attorney General Jim Hood in state court.

https://www.thegwpf.com/green-crap-another-solar-subsidy-business-goes-bust/

 

 

We keep being told that the cost of solar panel production is coming down, but how much of this is due to dumping by Chinese companies?

21 Comments
  1. Joe Public permalink
    October 23, 2017 11:21 am

    Love the excuse “Intense, non-market competition ….” that has impacted their market, and so shut them down.

  2. Bloke down the pub permalink
    October 23, 2017 11:22 am

    Meanwhile, the UK govt is trying to pick the winners from the losers. http://www.telegraph.co.uk/business/2017/10/22/designs-mini-nuclear-power-plants-proposed-rolls-royce-led-group/

    • HotScot permalink
      October 23, 2017 11:56 am

      “A fleet of these SMRs could be cheaply produced………..”

      That statement alone worries me. As usual, if the UK government’s involved, it’s done on the ‘cheap’ and destined to be a disaster.

      • Gerry, England permalink
        October 23, 2017 12:46 pm

        In theory RR already make the required reactors for naval use so it would not take too much technically to produce more. The problem will no doubt be regulatory.

      • TinyCO2 permalink
        October 23, 2017 2:08 pm

        Perhaps the answer is to keep them on ships.

      • It doesn't add up... permalink
        October 23, 2017 10:50 pm

        Gerry – not quite. Sub reactors are designed with subs in mind. Their use pattern is very different to supplying a grid, and cost is not an issue – compactness and ease of service/use, plus ability to produce a power surge if needed are the key requirements. There’s a lot of design adaptation required for grid use.

  3. HotScot permalink
    October 23, 2017 11:50 am

    Tragically, the people who won’t suffer are the directors/owners of these companies who have undoubtedly been paid nice fat salaries thanks to generous public tax donations.

    Whilst I have no problem with companies paying their executives high salaries, I do object when it’s taxpayer money paying them, especially when they are high risk start up businesses no bank or investor would touch with a barge pole.

    This is one of the major problems with governments getting their dirty digits into the business community. They have no concept of risk, or its analysis and have easy access to a huge pot of tax money to gamble on their business inexperience, with no consequences for failure.

    The bigger the government, the easier it is to dilute the responsibility for decisions taken to waste taxpayers money.

    So the crony capitalists profit whilst the employees and customers are left in the lurch.

    Governments should never be allowed to invest in businesses. If business can’t get off the ground in the first place, on their own merits, they wont survive anyway.

    Incentivising foreign businesses to invest in large manufacturing operations with tax breaks and property deals is also wrong. It merely highlights that if we have to manipulate our tax system to accommodate these organisations, our tax system is wrong in the first place.

    • Gerry, England permalink
      October 23, 2017 12:46 pm

      I really love my De Lorean.

    • October 23, 2017 12:54 pm

      ‘They have no concept of risk’ – they do now, but of course it’s too late and the public purse gets hammered again by the solar cowboys.

    • Tom O permalink
      October 23, 2017 1:19 pm

      Problem here, to me, is this –

      “But the company was already struggling in 2013 when venture capital firm Khosla Ventures took a controlling interest.”

      When an investment firm takes over a company, it is always about short term cash flow, and I would think that it bled what life was left in this company right from the start. I’m sure they got in and got out with a profit.

      And I do get tired of reading “dumping by the Chinese” as an excuse for not being able to be competitive to start with. The difference between the Chinese “dumping” and the actual non-competitive pricing is usually over salaried management.

      • A C Osborn permalink
        October 23, 2017 2:35 pm

        Sorry can’t agree with that last statement.
        The Chinese have been dumping their products on the whole world for the last ten or so years.
        Much of it is ripped off designs and very poorly made by very cheap labour.
        It is how they have expanded so fast.

      • HotScot permalink
        October 23, 2017 2:37 pm

        Tom O

        I’m not sure Chinese ‘dumping’ is incorrect. By my understanding, the state will fund Chinese production at bargain basement prices to sell overseas. Nor do they seem to enjoy much in the way of quality control, steel products rolling out the mills with only partially smelted bolts etc. from scrap metal visible.

      • Curious George permalink
        October 23, 2017 3:05 pm

        Mr. Vinod Khosla is successfully depriving California public of an access to a public beach.

      • It doesn't add up... permalink
        October 23, 2017 11:01 pm

        The Chinese grossly over-invested in solar panel capacity, potentially capable of supplying the entire world demand and more. The result was a lot of over production, and panels lying around unsold – and dumping.

        https://notalotofpeopleknowthat.wordpress.com/2016/06/10/how-china-dominates-solar-panel-industry/#comments

        https://notalotofpeopleknowthat.wordpress.com/2016/05/04/chinese-solar-panel-company-close-to-bankruptcy/#comment-68676

      • Tom O permalink
        October 24, 2017 12:43 pm

        To all those that are talking about Chinese dumping. You are all talking about product that is low quality. So, WHO is to blame, the people selling it, or the people buying it? You can’t dump low quality solar panels, as an example, without some solar installer/retailer willing to buy the trash and sell it at a quality price. I do not blame the Chinese for dumping, I blame the west for buying.

        And I will not change my mind about the cost of management driving the cost of production, thus pricing, up. That’s a given.

        Again, point the finger in the right direction. It wasn’t the Japanese’s fault when they were selling low quality items at a bargain basement price, nor is it now the Chinese’s fault. Either the economy doesn’t allow people to make enough disposable income to buy a better quality item, or western greed for the quick buck has encouraged it. You choose if you like, but I blame both with the second causing the first.

    • Gamecock permalink
      October 23, 2017 1:24 pm

      “Governments should never be allowed to invest in businesses.”

      Governments don’t invest; they spend.

      • HotScot permalink
        October 23, 2017 2:37 pm

        Gamecock

        True.

  4. Gamecock permalink
    October 23, 2017 1:23 pm

    ‘how much of this is due to dumping by Chinese companies?’

    And liquidation of inventory of domestic failures.

  5. keith permalink
    October 23, 2017 3:34 pm

    While not directly related there is interesting article in The Daily Caller how the Obama administration was running a giant green hedge fund and that now Trump is in John Podessa’s Green Energy Company has gone bust. Looks like Obama was nothing short of a Green crook.

    • A C Osborn permalink
      October 23, 2017 3:51 pm

      Yes, that was obvious by his policies and press statements.

  6. Bitter&Twisted permalink
    October 23, 2017 3:40 pm

    “Stion raised more than $200 million from private investors”,

    Fools and their money are soon parted……

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