Brought to you by the Department of Energy’s loan guarantee program, via The Daily Caller:
Internal documentation and testimony from sources within Abound show that the company was selling a faulty, underperforming product, and may have mislead lenders at one point in order to keep itself afloat.
“Our solar modules worked as long as you didn’t put them in the sun,” an internal source told The Daily Caller News Foundation.
The company knew its panels were faulty prior to obtaining taxpayer dollars, according to sources, but kept pushing product out the door in order to meet Department of Energy goals required for their $400 million loan guarantee.
One part of the solar panel called the buss bar, a piece of mechanical tape that conducts electricity, did not have the proper adhesion properties which caused it to crack out in the field, causing the panels to catch fire.
“That went on for three years,” another source familiar with the buss bars said. “That should have been everybody, hands on deck, fix this problem, but it wasn’t handled that way.”
A video obtained by The DC News Foundation shows a solar panel catching fire, which multiple sources identified as being one of Abound’s panels. In fact, the video was taken by one of Abound’s customers.
However, this behavior didn’t change even after the loan guarantee had been closed. The DOE revenue metrics and production goals were still in place and Abound kept pushing bad product out the door.
The company couldn’t afford to replace the panels, according to one source, because they needed to push all their panels out the door to meet revenue requirements
Finally, mix in what appears to be some very shady accounting practices to top it off:
As December 2010 drew near, it became apparent that the cash strapped company may not make it to sign the DOE agreement because “virtually all sales had been stopped or cancelled,” according to one internal source.
“Q2 2010 was a huge sales month but in October 2010 the proverbial shit hit the fan and customer complaints and internal testing came back to show that all product should be recalled if not simply replaced with working product,” one source wrote in an email.
They obtained a bridge loan from Silicon Valley Bank to keep them on their feet until the DOE loan closed. As collateral for the bridge loan they put up their accounts receivable from sales as well as their inventory.
Except that the accounts receivable were fake, according to a source, as they were cancelled orders that were not reversed on the company’s books, making it look like revenue was still flowing into the company when it wasn’t.
“We collateralized the loan with fake [accounts receivable] (the customer had canceled the order so the revenue should have be reversed but we kept it on the books for the banks benefits),” wrote one source in an email to the DC News Foundation.
Good enough for government money. Read the whole article, including a video of a solar panel catching fire.