A $300 million bet on solar

abound_solar.top.jpgAbound Solar may put $300 million into former DaimlerChrysler facility, hiring 900 workers. Is it for real? By Steve Hargreaves, senior writer

KOKOMO, Ind. (CNNMoney.com) -- Twenty miles south of Kokomo, Ind., sits an empty, 800,000-square foot factory built in the late stages of the now-dissolved DaimlerChrysler union. The factory, a victim of the breakup, never produced a single thing.

That may soon change.

Abound Solar, a scrappy Colorado startup barely three years old, recently won a $400 million stimulus loan guarantee from the federal government to make thin-film solar panels in the United States.

Abound plans to put three quarters of that money into the Kokomo plant, hire as many as 900 people by early 2012 and start exporting to Germany.

It almost sounds too good to be true. Indeed, town officials in Kokomo -- striving to recover with a big infusion from the Obama administration's stimulus programs -- seem to hold Abound's plans with guarded enthusiasm.

Company officials, meanwhile, are confident.

"This is a key piece of our manufacturing strategy," said Mark Chen, Abound's director of marketing. "Our contracts with our customers require us to continue to grow."

Abound, a private equity-backed company, grew out of a project at Colorado State University.

The company specializes in thin-film solar panels. Thin film panels are generally used in large-scale applications like big solar arrays run by utilities or massive rooftop systems that sit atop big box stores.

Abound has expanded rapidly over the past few years, going from just four employees in 2007 to 350 today. By 2013 its hopes to have 1,500.

The company chose the Kokomo area because it's close to the raw materials required for the panels, namely glass produced in cities like Toledo, Ohio, which also supplies windshields and windows for the auto industry, Chen said.

Like other companies that set up shop in the Midwest, Abound was also attracted by the skilled workforce, tax incentives and access to transportation to ship products.

"It's a straight shot up to the Great Lakes, on a boat, and it's out," Chen said.

Analysts say there's a healthy market for the the kind of thin film solar panels that Abound is making, especially if Europe keeps mandating more renewable energy.

But other companies are also in on this play.

One of them, First Solar, is big and has been producing such panels long before Abound came into existence.

Perhaps even more worrisome are two big boys entering the thin film market: One is Stion, which is 50% owned by Taiwan Semiconductor, one of the world's largest semiconductor companies. The other is Primstar Solar, which recently received big backing from General Electric.

"These companies have enormous amounts of cash, and are very good at making large amounts of components on a cheap basis," said Johanna Schmidtke, a senior analyst at the emerging technologies firm Lux Research.

That said, Schmidtke said she remains "hesitantly positive" on Abound.

Analysts said the federal grant to Abound is a good sign, and means the plant near Kokomo will more than likely be churning out products in the near future.

What's less certain is whether it will still be making things five years down the line. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,814.94 -2.96 -0.02%
Nasdaq 4,758.25 3.36 0.07%
S&P 500 2,067.03 -2.38 -0.12%
Treasuries 2.26 -0.05 -2.16%
Data as of 6:37pm ET
Company Price Change % Change
Apple Inc 117.60 -1.02 -0.86%
Bank of America Corp... 17.10 -0.08 -0.47%
Huntington Bancshare... 10.11 -0.07 -0.69%
Kinder Morgan Inc 40.75 -0.04 -0.10%
Facebook Inc 75.63 1.62 2.19%
Data as of 4:05pm ET


Jet fuel prices are down about 18% since August, but don't expect a break in your air fare any time soon. More

Retailers are repeating Black Friday deals from year to year, and offering the same discounts at other times. More

Sales of iPads and other tablets are slumping badly in 2014, and won't likely be a big hit during the holidays as they were last year. More

Ever since the Ebola epidemic erupted in her hometown of Foya, Liberia, Deboriah Foko has been working with Doctors Without Borders to inform others about this deadly virus. Here are journal entries from a day in her life. More

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer.

Morningstar: © 2014 Morningstar, Inc. All Rights Reserved.

Factset: FactSet Research Systems Inc. 2014. All rights reserved.

Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved.

Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor’s Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2014 and/or its affiliates.