Satcon Technology Corp., a U.S. maker of inverters for renewable energy sources, plans to close a factory in Canada that makes systems for smaller solar plants as it shifts its focus to large-scale, utility sun-powered projects.
A hundred and forty employees will be fired, about 35 percent of the workforce, Boston-based Satcon said today in a statement.
Satcon is eliminating its Solstice line of inverters for smaller, distributed solar systems, which are too expensive to be profitable, said Chief Executive Officer Steve Rhoades. It’s the latest company to cut back as increased supply and waning demand growth drives down prices for solar panels.
“The technology came at a higher price than the industry was willing to support,” Rhoades said today on a conference call. “We still see a very strong market for our other solutions.”
Rhoades expects inverter prices to stabilize this year and demand to increase over last year, especially in the U.S. and Asia. Profit margins will improve as Solstice is phased out, he said, without giving specific targets. The company will focus its sales efforts on large solar projects in the U.S., Canada, China and India.
Satcon’s gross margin, a measure of its earnings after production costs, was 11.8 percent in the third quarter, compared with 26.9 percent a year earlier, according to data compiled by Bloomberg.
The company will take a charge against earnings of $2.8 million to $3 million, mostly in the fourth quarter, because of the closing. It expects the move to result in annual savings of $15 million to $17 million once the restructuring is complete in the second quarter.
Satcon shares fell 10 percent to 57 cents at the close in New York. They have dropped 88 percent in the past year. It has a market value of $68.3 million.
Other companies are also expanding their efforts in utility-scale solar.
First Solar Inc., the world’s largest maker of thin-film panels, said Dec. 14 it’s focusing its marketing on large projects as governments in Germany, Italy, the U.S. and other important solar markets cut subsidies for solar projects, crimping demand growth.