Another solar manufacturer has run aground on the shoals of the industry’s structural imbalance, with the Colorado thin-film company Abound Solar—recipient of a $400 million federal loan guarantee—announcing a retooling that will at least temporarily cost 180 people their jobs.

The company, which makes cadmium telluride photovoltaic modules that compete with industry leader First Solar, said it would modify its plant and operations in order to produce a more efficient model that it hoped to have in mass production by the end of 2012.

abound solar loan guarantee
image via Abound Solar

“While this is a difficult move with regards to temporarily reducing our workforce, we know that accelerating the introduction of our next generation module will bring significant benefits to our customers and allow us to create even more jobs in the future,” Craig Witsoe, president and CEO of Abound Solar, said in a statement. “Current market conditions are challenging for all U.S. solar manufacturers, but the long-term winners will be manufacturers of the lowest cost per watt, most reliable systems. By focusing our resources to accelerate scale-up of our next generation high efficiency technology, we will sustainably lower total system costs for our customers, increase our own profitability and grow U.S. jobs and energy security.”

Abound said it has received about $70 million of the $400 million in loans it was guaranteed under a U.S. Department of Energy (DOE) program. The company seemed intent on distinguishing its predicament from the case of Solyndra, which received a $535 loan guarantee and blew through all the money before shutting down.

“Abound is in regular contact with the DOE and the DOE continues to be supportive of Abound and its technology,” the company said.

The DOE echoed that sentiment.

“We will continue to work with Abound as we do with all of our loan recipients as it works through these issues,” DOE spokesman Damien LaVera said to Forbes. “Abound is an innovative domestic start-up company with a history of bipartisan support.  While the challenges facing solar manufacturers have been widely reported, we continue to believe that supporting innovative companies like this is important to ensuring our nation has the ability to compete for the clean energy jobs of tomorrow.”

A good chunk of the loan guarantee money for Abound was intended to go toward building a facility in Tipton, Ind., which was to become the world’s largest thin-film manufacturing plant. When it received its loan guarantee Abound said development of the site was expected to begin in 2012. With its latest announcement it said it “still has long-term plans” for the plant and “anticipates having an update on a Tipton facility build-out in mid-2013.”

A lot will depend, of course, on whether Abound is able to succeed in its plan to set up a new manufacturing process for the higher-efficiency modules and make money selling them. The company said its current product performs at about 10.5 percent efficiency, but that its new modules will produce 85 watts per panel, with an efficiency of around 12.5 percent.

Abound Solar loan guarantee
image via Abound Solar

“This high efficiency module will reduce customers overall costs, including the module costs as well as the ‘balance of system’ costs such as racking, inverters, installation labor, land costs and others,” the company said. “In addition to lowering our customers’ costs, a high-efficiency panel lowers Abound Solar’s production costs per watt, thereby increasing profitability.”

Excess global solar manufacturing capacity—much of it based in China, which also faces accusations of dumping its products—has pushed prices below cost for many manufacturers. First Solar said this week that it would reduce its manufacturing capacity this year, leading it to delay the planned 2013 opening of a Mesa, Ariz., plant, among other measures.

Looming on the horizon for the cadmium-telluride manufacturers, too, is the arrival of GE, which is building a plant—without the help of loan guarantees—in the Denver suburb of Aurora that will be able to produce 400 MW of thin-film panels annually.

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