In the past week, two Massachusetts based clean energy firms declared bankruptcy.
On Wednesday, clean energy firm Satcon Technology Corp. filed for Chapter 11 bankruptcy. The firm, which specializes in the production of conversion equipment utilities for solar panels, defaulted on $16 million dollar loan from Silicon Valley Bank and Compass Horizon Funding Company LLC days prior to filing for bankruptcy.
CEO Steve Rhoades said, “After careful consideration of available alternatives, the Company’s Board of Directors determined that the Chapter 11 filings were a necessary and prudent step, allowing the Company to continue to operate while giving us the opportunity to reorganize with a stronger balance sheet and capital structure” (Boston Business Journal).
Earlier this week, A123, a lithium-ion battery and systems producer, filed for bankruptcy protection as well.
Valued at $125 million, the firm filed for Chapter 11 bankruptcy. The company was simultaneously picked up by Johnson Controls, a firm that specializes in the optimization of energy and operational efficiencies of buildings, automotive batteries, electronics and interior systems for automobiles. The Waltham based company employed nearly 2,500 people globally.
The political implication of these bankruptcies is far reaching. This past Tuesday, President Barack Obama and Presidential candidate Mitt Romney spoke on energy policy in a Town Hall style debate forum.
Considering that A123 received nearly $250 million in Federal funding from the Department of Energy, its bankruptcy has been met with criticism of the Obama administration’s energy policy. Furthermore, the administration has committed $80 billion in tax payer dollars on green energy investments. Investments include $11 billion for smart grid energy connections, $5 billion to “weatherize” low-income homes, $4.5 billion to reduce the federal government’s own energy bill, $6.3 billion to support state and local efforts, $600 million on training, and $2 billion on investments in battery storage technologies. Republican candidate Mitt Romney is adamant about decreasing government spending across the board, which would include a cut to the green energy investment fund.
What is your stance on government investment in green energy?
Contact: dfayngor@abgcommercial.com