(Corrects conversion in eighth paragraph of story published Sept. 14.)
Sept. 14 (Bloomberg) -- Calisolar Inc., a solar manufacturer that withdrew its application for a U.S. Energy Department loan guarantee, is firing 23 percent of its workforce as it shifts its business model.
Closely held Calisolar is firing 80 people at a solar-cell plant and will focus on manufacturing polysilicon used to make the cells, the Sunnyvale, California-based company said today in an e-mailed statement. Calisolar has 350 employees, according to its website.
The job cuts come as solar manufacturers are struggling with foreign competition and plummeting prices for their products. Prices for solar cells have dropped 43 percent in the past year, and solar-panel manufacturers Evergreen Solar Inc., SpectraWatt Inc. and Solyndra LLC have filed for bankruptcy in the past month.
“We will significantly downsize commercial cell production and -- as a result -- reduce the labor force” at the Sunnyvale, California, facility, the company said in the statement. The company said it is “reviewing several options” for the plant.
The company is building a polysilicon manufacturing plant in Mississippi after the state offered $75 million in incentives.
Calisolar was offered in June a $275 million Energy Department loan guarantee to build a plant in Ohio. It withdrew its application because it couldn’t begin construction by a Sept. 30 deadline, Damien LaVera, a department spokesman, said in an e-mail today. Solyndra received a $535 million loan guarantee in 2009.
Shifting to Polysilicon
Shifting to polysilicon makes sense because prices have held up better than solar-cell prices, said Aaron Chew, an analyst at Maxim Group LLC in New York.
Polysilicon costs $50.50 a kilogram ($22.95 a pound) this month, according to data compiled by Bloomberg New Energy Finance, 15 percent less than a year ago. Multicrystalline solar-cell prices fell 43 percent over the same period to 80 cents a watt.
Chew expects polysilicon prices to decline in the next year to “the mid 30s,” which will likely affect Calisolar’s profits. “The risk with these guys is they make a big decision based on current economics and in two years economics change,” he said.
Calisolar is seeking to be “the lowest-cost producer” of solar silicon, Chief Executive Officer Sandra Beach Lin said in a September interview. The company says it uses raw materials that cost less than what competitors use, according to its website.
Calisolar’s Mississippi plant will cost $600 million and allow it to produce 16,000 metric tons a year. It will employ 951 people, according to a statement from the state’s governor Haley Barbour. The company also has a plant in Ontario, Canada.
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