French solar producer Soitec, which opened its Rancho Bernardo plant with significant local and national backing, announced last week it would “implement an immediate scale down” of the factory and cut costs.

Just how deep those reductions run and what they mean for the company’s future in San Diego remains unclear.

The company’s stock prices tumbled nearly 60 percent following a Dec. 19 Voice of San Diego story that revealed the company’s struggle to hold onto crucial contracts that drew it to the region.

At the time, Soitec and San Diego Gas & Electric disagreed over whether the solar company still held a handful of lucrative contracts. Another high-profile deal with an Omaha-based Tenaska Solar Ventures also fell apart in 2014.

Soitec has since confirmed its SDG&E agreements are history.  A Soitec spokeswoman said the plant’s 250 workers were informed of the news and the need to scale back in the New Year as the company kicked off a planned two-week holiday closure earlier this month.

Soitec Vice President Clark Crawford played down the loss of the SDG&E in an interview with U-T San Diego last week. He said international business would eventually bolster the Rancho Bernardo plant.

“This is the failure of one project, of many projects that feed our demand,” Crawford told the U-T.

The company hasn’t provided specific details on those other projects or new ones that might kick off in 2015 but noted in a statement released last week that it “continues to explore new opportunities with its local partners in order expand its US pipeline.”

San Diego is home to the French company’s solar manufacturing headquarters, a distinction it’s held since the company halted work at another facility in Freiburg, Germany, in 2013.

In recent weeks, solar industry analysts have zeroed in on Soitec’s struggles as another example of the challenges facing producers of concentrated photovoltaic panels, which are more efficient but require more sunlight than traditional solar equipment. They’re also more expensive, and better suited for large-scale utility company projects than small rooftop installations.

Those smaller installations rely on photovoltaic panels, which have become cheaper over the years.

Industry news site Greentech Media detailed those dynamics last week:

The price to install silicon-based PV has plummeted due to volume and China, but CPV has not participated in this price drop. CPV’s reliance on high-precision trackers and high-cost semiconductors has negated its efficiency gains. This information has been available to the people and government of San Diego for years.

But Cleantech San Diego Chairman Jim Waring, who helped lure Soitec to the region, said Soitec’s struggles shouldn’t be seen as a failing of an otherwise successful local solar sector.

Regional leaders rolled out the red carpet for Soitec two years ago, offering state enterprise zone tax incentives and the city sped up the permitting process. The federal Department of Energy also handed the company a $25 million grant to expedite factory construction.

At the time, Waring said, the vision was that Soitec’s large-scale CPV production would allow it to manufacture at a lower cost that would allow it to compete with traditional solar panel manufacturers. And San Diego would get 450 high-paying manufacturing jobs and more diversity in alternative energy sources.

That plan was disrupted by a swift decrease in the cost of traditional panels that made CPV panels like Soitec’s less attractive to consumers and by the big Soitec deals that’ve fallen apart. Soitec delivered far fewer jobs and less power than it promised.

Now the 250 jobs that did materialize are up in the air.

A Soitec spokeswoman declined to say what may come next. Waring said earlier this week he was awaiting an update.

“The most serious issue is the 250 people who work at Soitec. And Soitec made a huge financial and emotional commitment to this region and has suffered a significant balance sheet loss,” Waring said. “That’s just mind-numbingly serious.”

Lisa Halverstadt

Lisa is a senior investigative reporter who digs into some of San Diego's biggest challenges including homelessness, city real estate debacles, the region's...

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