U.S. renewable energy and cleantech companies have been struggling in recent months, with the highest number of such firms filing for bankruptcy since 2014.
Many of the cleantech startups received support from investors and climate funds backed by Bill Gates or Amazon a few years ago. But the high interest rates now, some delays in federal incentives for green energy technology, and growing competition to raise more funds to finance often costly new energy solutions have created a perfect storm for many cleantech startups, the Financial Times reports.
SunPower, the California-based solar developer and operator, was probably the biggest and most famous victim of the recent culling in the cleantech industry.
Last month, SunPower filed for bankruptcy protection after slashing jobs and saying it would restate its financial results for the last two years on cost misclassification.
French energy giant TotalEnergies, which owns about 65% of SunPower, now faces the repercussions of these developments.
A weakening of the rooftop solar market in California was one big reason behind SunPower’s troubles, as inventories built up amid slackening demand. Regulatory reforms in the state contributed to the weaker demand as they removed a large part of the incentives that drove people to put solar on their rooftops.
SunPower was not the only victim of the troubles clean energy firms face.
Battery start-up Moxion Power, which had raised $110 million, shut down in July and laid off all remaining 250 workers. Amazon invested in Moxion Power’s technology through its Climate Pledge Fund in 2022.
Moxion Power and SunPower add to battery startup Ambri and wood pellets provider Enviva as the four companies that have filed for bankruptcy so far in 2024, the highest number since 2014, per Bloomberg data cited by FT.
Ambri, a provider of battery storage systems, emerged from bankruptcy in July after successfully completing a court-supervised sale process of assets seen by the management as the best course to facilitate a comprehensive recapitalization for the company and to secure its position for long-term growth and profitability.
Commenting on the recent troubles in the U.S. cleantech industry, Arash Nazhad, co-head of the cleantech group at Moelis, told FT,
“An increasing number of companies are at risk, particularly those spending more than they generate without a clear path to becoming cash flow positive”.
By Charles Kennedy for Oilprice.com
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