The latest casualty has struck Californian solar companies as Stirling Energy Systems files for bankruptcy. What we see is yet another innovative solar energy firm unable to cope with the changing economic and market forces in the solar energy field.
A Challenging Market For Solar Businesses
The key issue here is the price of photovoltaic panels. In recent years the PV panels have seen large scale manufacturing take-up in the Far East. Countries such as China are producing large amounts of PV panels and this has resulted in the price of solar power plummeting.
This has happened far faster than the industry anticipated and several businesses have suffered because of it. The most notable was Fremont California’s Solyndra Corporation which filed for bankruptcy in September. Solyndra had received a $535 million loan guarantee from the United States government and has consequently been turned into political baggage for the Obama administration. Solyndra was a victim of the falling prices of PV panels due to subsidized Chinese production. Since Solyndra, Evergreen Solar and SpectraWatt have also filed for bankruptcy.
The Stirling System
Stirling Energy Systems is different from the other firms in that their product was a different system of converting solar energy into power.
The company is responsible for developing a highly innovative approach to solar power, instead of solar photovoltaic panels, the more traditional solar panel, Stirling Energy Systems created a blend of solar collector (like a satellite dish but made of mirrors that focus the sunlight on a specific area) and 25 kilowatt “Stirling engine” system, a very efficient engine system which draws power out of the heat created by the solar collector. The concentrated sunlight heats up hydrogen gas within a ‘power conversion unit’, the heating and cooling of this gas is captured by an alternator which converts the energy into electricity. The technology is understood to be sound and the system is known to work well, but projects have been switching to PV panels instead.
Issues With Projects
Stirling Energy Systems was involved in two major solar projects in California and both had been approved by regulators. However, in both cases major changes to how the projects were to be managed left Stirling Energy Systems without a buyer.
The trouble started in December, when the Calico Solar project redesigned the project to use the new supply of cheap PV panels coming out of China. This basically rewrote Stirling Energy Systems’ technology out of the project.
However, the big trouble came this summer with the Imperial Valley Solar project. Previously, Interior Secretary Ken Salazar claimed Imperial Valley project would “advance the president’s agenda for stimulating investment in cutting-edge technology.” However, The California Energy Commission halted construction of the project in August after the San Diego Gas & Electric stopped their power-purchase agreement. Stirling Energy Systems could no longer find a purchaser, which spelled the end of the firm.
The challenging economic environment has played havoc on the Californian solar industry. Stirling Energy Systems is yet another example of the difficulties of working in the cutting edge innovative environment during an economic downturn.