Snowy Weather Blamed For Closure Of Solar Factory

A spinoff company from chip giant Intel has closed a solar cell manufacturing plant in New York, despite only opening it back in May.

SpectraWatt, which makes silicon photovoltaic cells, said in a statement that the cold and snowy winter in Europe, which has wreaked havoc on the continent’s travel system, also has resulted in a sudden and sharp decrease in demands for solar cell technology.

In addition, reductions in Germany’s incentives subsidies of up to 25 percent also played a role, according to the company, which announced the plant closing 21 December.

Germany is the largest solar market in the world. The reduction in subsidies reportedly will begin in January.

Weather And Subsidies

“If you look at the industry, this change in the market conditions has been very sudden for all the players involved,” David O’Connor, vice president for business development of SpectraWatt, said in an interview with the Poughkeepsie Journal. “The market conditions are difficult, as we said in our release, due to seasonality issues in the industry with respect to what’s happening in Germany and in general due to both weather and incentives.”

SpectraWatt opened its manufacturing plant in Hopewell Junction, N.Y., in May, and has been operating on an around-the-clock schedule in recent months. The plant  is located IBM’s Hudson Valley Research Park. The company also has R&D operations in Hillsboro, Oregon, where Intel also has facilities.

Intel spun off the company in June 2008 out of the giant chip maker’s efforts in creating renewable sources of energy. Intel Capital led an initial investment round of $50 million (£32 million). The company was charged with making photovoltaic cells and selling themto solar module makers. SpectraWatt’s R&D efforts were aimed at improving manufacturing processes and capabilities to lower the overall costs of energy created through photovoltaic cell technology.

“SpectraWatt is a great example of technology resulting from entrepreneurial efforts inside Intel,” Arvind Sodhani, president of Intel Capital and Intel executive vice president, said at the time of the spin-off announcement. “This is an important investment for Intel Capital in the growing cleantech sector and we look forward to working with the company to support its expansion.”

Green Investment

Over the past two-plus years, other firms – including the US Department of Energy – invested in SpectraWatt, which established its headquarters in New York in 2009. In March, SpectraWatt generated $41.4 million (£27 million) in another round of funding from such investors as Intel Capital, Cogentrix Energy, and PCG Clean Energy & Technology Fund.

“These investors share our vision of an empowered US-based solar industry delivering innovative industry-leading products,” Andrew Wilson, SpectraWatt CEO, said in a statement announcing the funding. “The funds will allow us to expand and build toward that national goal.”

SpectraWatt garnered a lot of attention this year, winning some grants and awards and getting a visit to its manufacturing plant from CNN.

The closure – which SpectraWatt executives say they are hoping to reverse before the layoffs start in March 2011 – is a blow both to local economic efforts as well as to green technology initiatives championed by the Obama Administration, which has made finding renewable sources of energy a key part of its overall economic platform.