SAN FRANCISCO—Satcon Technology Corp. Wednesday (Jan. 4) became the latest U.S.-based solar power equipment maker to slash jobs, announcing a set of cost reductions that include cutting 140 jobs, or about 35 percent of the company's total workforce, and the closure of its Canadian manufacturing facility.
Satcon (Boston), which markets photovoltaic inverters, said it is working to partner with a contract manufacturer to maintain production in Ontario, Canada, in order to satisfy Ontario's feed-in tariff requirements. The company said it has restructured its office and warehouse infrastructure in Europe, China and the U.S. to reduce costs and better align with market conditions.
The workforce reduction and closure of the Canadian facility would result in charges of about $2.8 million to $3 million. The majority of the charges are expected to occur in the fourth quarter of 2011, with the remainder taking place in the first quarter of 2012, Satcon said. The company expects ongoing savings of approximately $15 million to $17 million per year once all actions are implemented by the second quarter of 2012, it said.
Photovoltaic inverters convert the variable DC output from photovoltaic modules into AC current for use in the electrical grid. In recent months, a number of U.S.-based manufacturers of solar panels have cut jobs due to a difficult business environment and stiff competition from China-based firms.
Satcon said it is also currently analyzing its inventory and certain non-cancellable supplier-held inventory, and will write down the value or take a charge to reflect current market conditions. This will result in expected charges during the fourth quarter of 2011 of approximately $20 million to $26 million, with the majority of the charges comprised of non-cash items. These charges were not anticipated when the company provided its fourth quarter 2011 guidance, Satcon said.
"The worldwide solar market conditions in 2011 demonstrated the dynamic nature of this maturing industry," said Steve Rhoades, Satcon’s president and CEO, in a statement. "The compounding effects of reduced panel costs and market demand shifts toward North America and Asia have forced the entire industry to adjust as we enter the next phase of development."
But Rhoads said decreasing panel prices present a significant opportunity for Satcon, with the demand for its large-scale inverter solutions nearly doubling in North America and Asia year-over-year. He said the measures announced by Satcon Wednesday would help ensure that the company achieve the financial strength required to maintain its leadership position in large scale inverter systems.