Solar panel maker OptiSolar Inc. is laying off nearly half of its workers, including 105 of the 175 employees at its McClellan Park plant, the Hayward-based firm announced Friday.
"It's because of the terrible economy and our inability to access investment capital," said spokesman Alan Bernheimer. The company also laid off 185 workers at its only other facility, in Hayward.
OptiSolar roared into the Sacramento region last year with plans to remodel former Air Force warehouses into a 1 million-square-foot factory that would employ up to 1,000 people – ultimately the biggest solar-panel plant on the continent, according to OptiSolar.
In March, Sacramento County supervisors approved a $20 million package of tax breaks for the company over 25 years.
In November, Gov. Arnold Schwarzenegger stood before the OptiSolar factory as he ordered the state's utilities to provide more of their power from renewable sources.
For most of last year, the solar business was an island of optimism in the darkening economy. The industry's U.S. sales volume more than doubled in 2008, according to preliminary estimates, and in October, Congress extended a key subsidy program for eight years.
But now the downturn has caught up to solar as well. Local solar-panel installers have reported losing bank lines of credit. Financial giants that had been pouring money into solar have collapsed or pulled back.
OptiSolar is applying for a loan guarantee from the Department of Energy which, if granted, would help the company raise money, Bernheimer said.
A small assembly line is operating at the McClellan site, producing solar panels for a photovoltaic energy farm OptiSolar is constructing in Ontario, Canada. The layoffs will not affect those operations, Bernheimer said.
But expansion of the plant is on hold until at least the second half of 2009, he said. Optisolar must dramatically expand capacity at the site to produce the panels for its flagship project, a 10-square-mile array of solar panels proposed for San Luis Obispo County.
At 550 megawatts, the project would be bigger than any solar power system yet built. Construction is scheduled to begin in 2010, with costs estimated at $2 billion. Pacific Gas and Electric Co. has signed a contract to buy the power beginning in 2011, but OptiSolar must finance and build the project.
Sacramento County's package of tax breaks for OptiSolar hasn't taken effect yet, said county Economic Development Director Rob Leonard. The discounts on electricity and property taxes are tied to employment and investment targets the company did not meet in 2008, he said.
Supervisor Roger Dickinson said Friday he believes OptiSolar will recover and that green tech remains a sound economic development priority for the region.
"Everyone's struggling with finding capital," he said. "I still think there's an enormous amount of potential in the field of alternative energy."
As required under state law, employees will receive full wages and benefits for 60 days after the announcement of the layoff.
Call The Bee's Jim Downing, (916) 321-1065.
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