WASHINGTON — California solar manufacturer Solyndra announced Wednesday that it was shutting down a factory built with the help of a $535 million federal loan guarantee and would file for bankruptcy.
It's the latest blow to U.S. efforts to regain a top spot in solar manufacturing and create jobs in the globally fast-growing clean-energy sector. Another American company, Evergreen Solar, filed for bankruptcy earlier this month.
Solyndra put 1,100 people out of work with the closure of its plant in Fremont, Calif. President Barack Obama visited the factory in May 2010 and stressed the importance of increasing U.S. production of solar panels.
Solyndra, which made cylindrical solar photovoltaic systems for commercial rooftops, said in a statement that it couldn't scale up fast enough to compete with larger foreign manufacturers. It had been struggling with competition from China.
Solyndra exported its solar systems around the world, most recently to a supermarket rooftop in a suburb of Brussels. It also built the rooftop solar system for Seattle's football stadium, Qwest Field, home of the NFL's Seahawks.
Solyndra President and CEO Brian Harrison said the company's failure was unexpected. He blamed regulatory policy changes that created oversupply and falling prices, and said it had become impossible to raise capital.
The global economics of solar power have been changing fast, the Department of Energy said in a blog post response to the Solyndra news. It cited these trends:
_ China, which exports more solar panels to the United States than any other country, has been providing interest-free financing to its companies.
_ European countries have been reducing their subsidies for solar power. Europe is the world's biggest solar market.
_ The price of solar cells has fallen 42 percent since the beginning of the year.
In Congress, the Solyndra loan guarantee already had become the focus of a fight over Obama's economic stimulus program, which included money to boost renewable energy.
The Republicans who control the House Energy and Commerce Committee had been investigating the use of stimulus money in 2009 for the Solyndra loan guarantee. The company ran into financial problems afterward and hadn't hired as many people as expected.
The committee issued a subpoena in July that compelled the White House Office of Management and Budget to turn over documents about the Solyndra loan guarantee.
"We smelled a rat from the onset," committee Chairman Fred Upton, R-Mich., and Oversight and Investigations Subcommittee Chairman Rep. Cliff Stearns, R-Fla., said in a statement Wednesday. "As the highly celebrated first stimulus loan guarantee awarded by the DOE, the $535 million loan for Solyndra was suspect from day one."
Rep. Henry Waxman of California, the ranking Democrat on the committee, said in a statement that the bankruptcies of Solyndra and Evergreen showed "that the United States is in danger of losing its leadership position in the clean energy economy of the future."
"Congress needs to get serious about promoting energy independence, reducing emissions that contribute to climate change and developing clean energy industries in the United States," Waxman said. "We should be doing everything possible to ensure the United States does not cede the renewable-energy market to China and other countries."
Department of Energy spokesman Dan Leistikow noted that private investors had put more than $1 billion into Solyndra and the company had sold more than 1,000 solar systems in 20 countries.
Leistikow defended the loan guarantee program, writing on the department's blog, Energy.gov:
"We have always recognized that not every one of the innovative companies supported by our loans and loan guarantees would succeed, but we can't stop investing in game-changing technologies that are key to America's leadership in the global economy. These projects, which include more than 40 other companies, are on pace to create more than 60,000 jobs."
In solar manufacturing, foreign competitors have claimed a large share of a growing market.
The DOE blog item included a chart that showed that U.S. share of the solar market dropped from 43 percent in 1995 to 7 percent in 2010. However, the U.S. was a big fish in a small pond in the 1990s, when global solar production was tiny compared with today.
Solar purchases have been going up in recent years, boosted by favorable policies in Europe, Canada, China and some U.S. states.
China is the biggest exporter of solar panels to the U.S., followed by Mexico.
The U.S. imported $2.6 billion worth of photovoltaic products last year, up from $433.6 million in 2006, Andrew David, an analyst in the U.S. International Trade Commission, wrote in a June report.
U.S. exports of solar products have been increasing, but not as fast as exports from the leading Asian producers, David wrote. The U.S. exported $1.4 billion last year, up from $442.7 million in 2006.
The Solar Energy Industries Association, a national trade group, reported earlier this week that the U.S. solar industry's exports exceeded imports by $1.9 billion in 2010.
It included polysilicon, the raw material for solar cells, and equipment used to manufacture solar modules in the figure for U.S. exports.
MORE FROM MCCLATCHY