A San Diego solar factory that rode into town on a wave of fanfare and government assistance is now on its last leg.

Soitec, one of the region’s only solar manufacturers, came to San Diego in 2011, bolstered by the promise of lucrative power contracts with San Diego Gas & Electric and a project in Imperial Valley with Omaha-based Tenaska Solar Ventures. Those deals were crucial to the company’s decision to build its plant in Rancho Bernardo.

The Tenaska deal is now history, and Soitec confirmed Friday its SDG&E agreements are also in peril.

In fact, SDG&E and Soitec disagree on whether their contract even still exists.

Local Soitec chief Clark Crawford said the company has sought meetings with SDG&E for weeks in hopes of discussing the future of its contract.

“To date, they have declined to discuss the issues directly with us,” Crawford said in a statement. “If they continue to decline a meeting with us today we fear they may allow the power purchase agreements to just terminate.”

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SDG&E, meanwhile, says it’s gone out of its way to accommodate Soitec and that the company’s statements about the status of its contract aren’t true.

“SDG&E does not have any contracts with Soitec,” utility spokeswoman Jennifer Ramp said.

It wasn’t supposed to be this way.

Soitec, one of the region’s only solar manufacturers, made national headlines in 2011 when it opted to come to San Diego. The French company promised 450 local jobs and at least 200 megawatts of solar production a year.

Soitec’s arrival was supposed to be a shining example that large-scale manufacturing was possible in San Diego after all. State, local and national leaders lined up to make Soitec a success.

In the months following the 2011 announcement, the company received a $25 million grant from the federal Department of Energy to expedite construction of its San Diego home and signed on for state enterprise zone tax incentives. The city put its permits on fast-forward.

All that help would ensure the company hit the ground running, Soitec said.

It also had the crucial SDG&E and Tenaska contracts.

“Our recent announcement worldwide shows that we have the perfect technology for the new wave of growth into solar markets,” Soitec CEO André-Jacques Auberton-Hervé said as the company’s Rancho Bernardo plant was dedicated in December 2011.

All that has crumbled.

“The expectation that formed the basis of Soitec’s investment in California has not been realized,” Crawford said in a declaration submitted to the state Public Utilities Commission earlier this month, pleading with officials to force Tenaska to use Soitec products in its project.

Soitec has produced far fewer solar panels than initially laid out in its  local power agreements.

Project cancellations and reductions have meant only about five megawatts’ worth of solar panels – enough to power thousands of homes – have been manufactured in San Diego, Crawford said in the document.

The company initially planned to produce 305 megawatts of solar panels in its SDG&E-tied projects alone.

Soitec is considered the world leader for concentrated photovoltaics panels, or CPV panels, which are more efficient but require more sunlight than traditional solar equipment. They’re also more expensive, and are better suited for large-scale utility company projects than small rooftop installations.

CPV panels only made up 0.25 percent of the global market share for panels installed in 2014, according to industry news site GreenTech Media, which noted Soitec was one of only three companies “hanging on to any semblance of a functioning commercial enterprise.”

As Soitec was setting roots down in San Diego, other companies that made the niche solar panels were already floundering.

Scottsdale, Ariz.-based Stirling Energy Systems filed for bankruptcy in September 2011. German company Solar Millennium filed for insolvency in December 2011. And Soitec competitor Amonix, based in Seal Beach, closed its Nevada plant in July 2012.

But SDG&E and Soitec proponents went all in for the company anyway.

The tradeoff would be great energy diversity for SDG&E, which was required to hit a 33 percent renewable energy target by 2020, and the 450 high-quality jobs.

Then Soitec’s plans to build four solar power plants in Boulevard hit repeated delays.

Tenaska opted not to use Soitec’s CPV panels in its project after all. The decision went public this April.

Tenaska said it parted ways with Soitec after the company couldn’t provide information sought by a Tenaska construction contractor to guarantee Soitec could deliver on the promises in the energy contract.

“The project schedule necessitated moving forward with a different engineering, procurement and construction contractor and a different technology,” said Delette Olberg, Tenaska’s vice president of government and public affairs.

The SDG&E agreements, held up as primary evidence of Soitec’s ability to flourish in California, also hit major hurdles.

An SDG&E spokeswoman said the company allowed an “unprecedented” 19 amendments to its five Soitec deals to help the company deliver on the promises in those contracts, including deadline extensions and location changes. (Soitec says it only pushed for two of those changes and that SDG&E is counting amendments applied to the company’s contracts multiple times.)

All those contracts eventually went to other groups.

First came the April announcement that Chicago-based Invenergy Solar Development would take over Soitec’s Borrego Springs project. Then in October came the news that “one of the largest providers of solar energy services in North America” had bought out Soitec’s four remaining SDG&E agreements. The company never disclosed the name of that the buyer.

Soitec said that project would involve up to 83,400 solar modules produced at the company’s San Diego factory.

Auberton-Hervé, Soitec’s CEO, put a positive spin on the sale.

“This is an important milestone in executing Soitec’s strategic plan, as this agreement will provide significant demand to our U.S. solar manufacturing operation,” he said in a release.

Soitec now says that deal wasn’t consummated.

“The company that they were originally transferred to was unable to work through all of its major milestones and therefore the power purchase agreements were transferred back to Soitec this week,” Soitec spokeswoman Karen Hutchens said.

SDG&E maintains it doesn’t have any contracts with Soitec – a glaring disconnect between the two companies.

Soitec’s recent California Public Utilities Commission filing underscores the company’s struggles here.

Soitec invested more than $200 million in its San Diego factory, Soitec attorney Jerry Bloom wrote to the commission earlier this month. Bloom later claimed “the social and economic benefits” of the San Diego Soitec plant were negated by the loss of the Tenaska contract.

The situation for Soitec apparently only got worse after that Dec. 5 filing.

Mark Cafferty, CEO of the San Diego Regional Economic Development Corp., was one of Soitec’s early cheerleaders.

He acknowledged Friday he and others were excited about what clean technology could mean for California, and the possibility of attracting a manufacturing company to San Diego.

“Everybody was working very hard to make this happen. If we missed writing on the wall … it’s possible,” Cafferty said. “It’s a very entrepreneurial sector, a new sector and a changing sector. There are lots of companies that start and fail and others that hit home runs. Hopefully Soitec was going to be one of those companies.”

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    Written by Lisa Halverstadt

    Lisa writes about San Diego city and county governments. She welcomes story tips and questions. Contact her directly at lisa@vosd.org or 619.325.0528.

    Mark Giffin
    Mark Giffin subscribermember

    Alternative energy stocks as a general rule are good traders but poor investments. Are there any that can survive without subsidies?

    Phillip Franklin
    Phillip Franklin subscriber

    From what I have read it sounds like Soitec simply failed from it's own inability to deliver.  It was one of those operations that wanted to start at the top instead of work its way there. It is not too dissimilar to the big shot's son who starts at the top of the corporate or business ladder a fails miserably.   Most people don't understand the need for many years of experience  and the ability to internally grow a company or a business from the ground up.  It has little or nothing to do with the market or demand for the product.  Sometimes companies fail for their obvious inherent inability to succeed even if the game is rigged in their favor.  That is really all this story is about.

    Daniel Ferra
    Daniel Ferra subscriber

    When you remove Home Owners and Business People from investing and profiting from there Own Renewable Energy Systems embedded in Energy Policy,  you will  have low Solar installation numbers.

    A California Residential Feed in Tariff would allow homeowners to sell their Renewable Energy to the utility, protecting our communities from Poison Water, Grid Failures, Natural Disasters, Toxic Natural Gas and Oil Fracking. It would also create a new revenue stream for the Hard Working Taxpaying, Voting, Homeowner.

    Sign and Share this petition for a California Residential Feed in Tariff.

    We need a National Feed in Tariff, this petition starts in California. 

    California currently has a Feed in Tariff that does not allow home owners to participate in the State mandated goal of 33% renewable energy by 2020.

    California also does not allow the homeowner to oversize their R.E systems, as of now, your local utility has allowed only 80% homeowner generation from your R.E system.

    California has 2 different Energy policies Net-metering and a Feed in Tariff.

    Net metering the energy policy for homeowners, allow you to bank excess electricity from R.E systems for future credits. The credits you accumulate are at the retail rate, and are reviewed at the end of the year. It will be written off with a thank you from the utility and no payment to the homeowner for producing more than what you use.

    Net metering has allowed third party leasing companies to replace one utility with another.

    "Examples of Net-metering slow down Renewable Energies:

    1. Renewable Portfolio Standards (RPSs) which create de facto caps on the deployment of renewable energies (the Germans do not have any RPSs, their Feed in Tariff has no caps.

    2. Net-metering caps, most states only allow a small percentage of one to two percent of peak load to be net metered.

    3. Third party leasing companies like Solar City, Sun Run, Verango and others fight tooth and nail to protect scarce capacity carve outs (from the States RPSs) so as to bolster their chosen business model." Bob Tregilus

    No one is fighting for the Hard Working, Taxpaying, Voting, Homeowner, we can change that with a Ca. Residential Feed in Tariff Energy policy that allows everyone to participate. Homeowner’s, Small and Large Businesses, Small and Large farmers, and Industries, have the right to sell Renewable Energy electricity to the utility.

    Vote Solar Initiative is a Sierra Club and Solar Leasing Companies platform to ensure that One Utility will take the place of Another through the continued use of Net Metering.

    We need a Policy that will enable Hard Working, Voting, Tax Paying Citizens, get a chance to participate in the States goal of 33% Renewable Energy by 2020 through a California Residential Feed in Tariff.

    California, there is enough Residential Solar to power 2.25 San Onofres, couple that with a Commercial Feed in Tariff and we can solve some of these environmental and electrical generating problems.

    This petition will ask the California Regulators and Law makers to allocate Renewable Portfolio Standards to Ca. Home Owners for a Residential Feed in Tariff, the RPS is the allocation method that is used to set aside a certain percentage of electrical generation for Renewable Energy in the the State.

    shawn fox
    shawn fox subscriber

    @Daniel Ferra Sorry to tell you this, but there is no way that Solar alone can replace all fossil fuel use or end fracking.  Some of the ideas posted seem interesting while others seem like wishful thinking.

    Michael Robertson
    Michael Robertson subscribermember

    Another sad chapter revealing the green energy myth. Politicians cannot outsmart the free market. If solar made economic sense, investors would fund these sun chasing efforts. Whenever you read that the government is spending tax money on something, it means investors the world over have declined to do so making it almost certainly a bad investment.

    David Cohen
    David Cohen subscriber

    @Michael Robertson 

    "Whenever you read that the government is spending tax money on something . . ." like the failure of investors to raise an army?  to fund diplomatic missions in other countries?  to buy the land for National Parks?  etc?

    Phillip Franklin
    Phillip Franklin subscriber

    @Michael Robertson Michael why do you try and make some sorted political comment about every story here? This story is not about a market failure, but a simple business failure since it was promised lucrative contracts from an energy giant. (in essence it had a guaranteed customer)  It simply failed to deliver based upon its own internal inabilities.  It has nothing to do with the "market".  The market for the goods and services was handed to it.  It simply could not perform.  It made big promises to its investors and to those who were offering up lucrative contracts.  But it failed to deliver on those promises.  Unfortunately the government fell for those promises just like SDG&E.    Haven't you ever heard of a business that fails simply because it is either incompetent or so poorly managed it can't get the job done despite a lucrative market?  Think about that for just one minute, please.

    BTW it seems SDG&E had no problem with finding a different supplier source to meet its needs for this form of solar based products. 

    Michael Robertson
    Michael Robertson subscribermember

    When tax payer money is involved, it is political because the money is from political favors. You're right businesses fail all the time, but that's is investors money who willingly part with their money.

    Soitec squandered money taken by force from workers in our society. That's bad. Taxpayer money should not fund businesses. Not for football stadiums, solar plants or breweries.

    I hope we agree that tax money shouldn't go to invest in any business.

    Phillip Franklin
    Phillip Franklin subscriber

    @Michael Robertson I do agree with you 100% that tax payer money should not have been used to fund this operation.  Only in the most rare of circumstances which there are guaranteed direct benefits to society that tax payer money can be used to help develop a business.  And when that is the case the tax payers or the public should hold some reasonable type of equity stake in the operation based upon this funding.  However politics in general gives great gifts to those in powerful situations in return for political support which is basically bribes.  Just recently the Republicans increased the personal contribution allowance by ten times in the most recent budget funding bill.  And I don't see things changing anytime soon.

    Michael Robertson
    Michael Robertson subscribermember

    I'd agree with this. I'd add that both parties have their political benefactors.For the Dems 2 big sources are unions and attorneys. That's how each party got political donations of $1 billion in the last presidential cycle.

    The remedy is to make government smaller so there's less opportunity to buy favors. Also nice to flat tax and judicial reform.

    Laws saying you can't buy favors are worthless because they're ignored or circumvented.

    Michael Robertson
    Michael Robertson subscribermember

    Oil companies are not subsidized billions of dollars. It's a myth that people push so they can also feed at the government trough. Oil companies pay billions in taxes to the government.

    For the record, I oppose tax dollars being given to any corporation whether a NFL franchise, a corn gower or a solar company.

    Edward Teyssier
    Edward Teyssier subscriber

    Doesn't  anyone proofread these articles?  "Soitec is one of San Diego's only solar manufacturers." What does that mean?

    a.  Is Soitec San Diego's _only_ solar manufacturer? Or, b.,  is it _one_ of San Diego's solar manufacturers?  Or c., is it a "solar only" manufacturer?  Or, d.,  something else? 

    In any case, the article says it manufactures solar....ok, so I guess that means it generates sunlight by thermonuclear fusion, right?

    Hello, can we get an editor over here, please? 

    msginsd subscriber

    @Edward Teyssier Get with the times, Edward.  Blogs, even glorified blogs, don't use editors.  

    jeff scott
    jeff scott subscriber

    It didn't take a rocket scientist to know that ALL of the "clean energy" technology California and Obama believed would make for a great economy, would be mass produced in china! Clean-tech does not require any intelligence that China cannot provide. 

    Obama, and this f'd up state, has bet its economy on producing clean tech. All the while imposing oppressive regulations on those who try to manufacture it.

    Not surprised at all......

    Mike subscriber

    So how much money did San Diego lose on this whole mess?  Was our incentive agree with the company front loaded or did San Diego protect itself from the risk of such messes?

    Bill Bradshaw
    Bill Bradshaw subscribermember

    Wait a minute.  Wasn't Solyndra the only mistake the feds made when handing out "stimulus" dollars? 

    Richard Rider
    Richard Rider subscribermember

    Excuse ME, Voice, but this Soitec story is clearly a fabrication.  I know this to be a fact because the U-T has not a word about this on its website -- only a rah-rah Soitec story (complete with pom-poms) from late October. If it's not in the U-T, it simply CAN'T be true, right?

    Well, right???

    SOMEBODY tell me I'm right.   PLEASE!!

    Julie Wright
    Julie Wright subscribermember

    @Richard Rider Not right, Richard.  The primary incentive when Soitec came to San Diego was the SDG&E commitment.  SDG&E has bent over backwards to work with Soitec but ultimately had to move on to meet its own goals.  The story is not a fabrication.