Solar-power equipment manufacturer Stirling Energy Systems Inc. has filed for bankruptcy, adding to a wave of troubles in the solar industry amid soft demand, falling prices and difficulty raising money.
Solar-power equipment manufacturer Stirling Energy Systems Inc. has filed for bankruptcy, adding to a wave of troubles in the solar industry amid soft demand, falling prices and difficulty raising money.

Scottsdale, Ariz.-based Stirling Energy developed equipment for two solar-power plants designed to convert heat from the sun into electricity. Neither of the plants were able to obtain government loan guarantees, although both were sited on public land in California and obtained fast-track construction permits from the Obama administration.

Stirling filed for Chapter 11 bankruptcy protection last Friday, after it failed to find a buyer for the company, according to documents filed with the U.S. Bankruptcy Court in Delaware .

The filing is the latest in a string of U.S. solar company bankruptcies, as soft global demand for solar power, falling prices and a glut of solar panels from Asia have hammered manufacturers.

Earlier this month, California solar-panel maker Solyndra Inc. filed for bankruptcy after receiving more than $500 million in federal government assistance. The company is also the subject of numerous criminal and congressional investigations. In August, two U.S. solar companies--Evergreen Solar Inc. and start-up Spectrawatt Inc.--filed for bankruptcy protection, citing falling solar-panel prices and fierce competition from well-financed Chinese rivals.

Signs of trouble at Stirling , once a rising star in California 's growing renewable-energy market, emerged in December, after its largest investor, Dublin-based NTR PLC, said that difficulties at Stirling and another of its renewable-energy units led to a EUR148 million write-down. In August, NTR wrote down another EUR280.2 million in losses from Stirling and solar development unit Tessera Solar, and said that it was unable to find third-party investors to infuse capital into the companies.

Meanwhile, Tessera, which designed two power plants to run on Stirling 's technology, wasn't able to obtain government loan guarantees for the projects. In December, Edison International's (EIX) southern California utility terminated its contract with Tessera to purchase the output from one of the plants, the 663-megawatt Calico Solar plant.

Tessera sold Calico Solar to developer K Road Power, which redesigned the project to use primarily solar panels to generate electricity, but also included a portion that would use Stirling 's technology. An amended license to build the facility was still pending at the California Energy Commission.

In February, Tessera sold the second solar-power project, called Imperial Valley Solar, to AES Solar, a joint venture owned by AES Corp. (AES) and private equity firm Riverstone Holdings LLC. But AES abandoned that project after Sempra Energy's (SRE) San Diego Gas & Electric utility terminated its contract to purchase the output from the facility, according to California government records.

San Diego Gas & Electric canceled the contract after AES changed the technology and some of the contract terms, said Stephanie Donovan, an SDG&E spokeswoman. "It wasn't going to work out for us," Donovan said.

Spokeswomen at AES Solar declined to comment.

Just last October, the Imperial Valley Solar project, which was to be built on public land in California and create 900 construction jobs, obtained a key federal permit, to much fanfare.

At the time, Interior Secretary Ken Salazar said the project would "advance the president's agenda for stimulating investment in cutting-edge technology, creating jobs for American workers, and promoting clean energy for American homes, businesses and industry."

Telephone calls to Stirling and NTR weren't immediately returned.

K Road Power is proceeding with development of the Calico Solar project, although the company was "still digesting the Stirling bankruptcy" and had "not made any final decisions yet" on how to proceed with the portion of the facility that was to use Stirling's technology, Dan O'Shea, a senior vice president at New York-based K Road, said Thursday.

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