Solyndra Gets Low-Ball Offer from Seagate for Facility
The infamously bankrupt solar manufacturer Solyndra has received a $90.3 million offer from Seagate, a disk-drive maker, for its factory in Fremont, Calif.
Should Solyndra accept the offer, priced at about 70 percent below the $300 million it cost to construct the plant, the purchase will be complete no later than Feb. 28 of next year. Seagate's offer is the initial bid, which could be toppled by competitors when an auction is held, according to Wednesday's reports.
In 2011, Solyndra's financial adviser and investment banker Imperial Capital LLC started marketing the property to 150 potential buyers to countries around the world, but an acceptable offer never surfaced. When Jones Lang LaSalle Inc was hired in February to market the property, the highest bid came from Seagate.
In the unfortunate case of Solyndra, which received a $535 million federal loan guarantee only to go bankrupt, clean energy advocates have received a lot of political backlash from Republicans who point to the incident as a sign of weak energy policy under the Obama administration.
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But “with all the sensationalism, it's hard to tell fact from fiction,” former VP of Channel Sales at Solyndra, Inc. Scott Starr said in a presentation. “There's a lot of publicity, but no electricity.”
Despite all the hype, Starr says these are all expected trends for a rapidly maturing market. He explains that the industry was well aware that prices would be going down, but they “clearly went down faster than we had forecasted.” It's been a tremendously difficult market to predict and its complexities make picking “winners” very difficult. While the market experienced a significant drop in prices in 2010, it more recently experienced a drop of as great as 40 percent, Starr adds. And while every doubling of capacity of modules on the market is expected to bring down prices, those are usually somewhere around 15 percent. The plummet from around $1.80 per watt to about $1.05 per watt today was much more dramatic.
Pulling through the next few years, some companies will gain the upper hand, some will lower the quality of modules, while developers get caught somewhere in the middle. Ultimately, demand will remain the strongest driver. Despite a few more bumps in the road, however, Starr sees a very positive future for the industry beginning around 2015 as solar moves closer to grid parity. After solar hits retail parity around that time, solar will be well on its way to competing at the wholesale level.
As electricity rates of utilities across the US increase, “I have little doubt that, with the evidence of cost-out in the industry, that solar will get to a place of parity,” Starr said.
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