Optisolar is Dead For Now — Who's Next?

Optisolar, a company that likely scored in the top five list of most promising thin-film startups for many solar industry watchers, appears to be out for the count. Having sold its project portfolio to First Solar, it has now closed its factories and settled back in hopes of attracting a stray investment.

In all likelihood, that investment won’t come. It certainly could, given a few years; but in that span of time, companies wth more funding will be hard at work on their technology, surpassing whatever achievements Optisolar managed to make during its time.

What interests me in this debacle is pondering why Optisolar would collapse right after First Solar paid the company $400 million. That’s no small amount; in fact, it exceeds any single venture investment made in a thin-film panel maker to date.

But Optisolar was apparently never venture funded, at least not by the Silicon Valley firms that still bankroll most cleantech startups. The company had an unnamed sugar daddy supporting its development.

My guess is that it was a private equity or hedge fund that went from good times to very bad in the recession, and found a need to suddenly call back its investment in Optisolar. The easiest way to do so would closely resemble what actually happened: Selling off the project portfolio and quickly closing the rest of the company to prevent further cash losses, hopefully pending sale of the remaining assets.

That all makes Optisolar something of a special case. Then again, no matter how unusual the circumstances of one’s death, the end result is the same for all who suffer it. Optisolar’s case, taken alongside the sudden, spectacular DOE funding success of Solyndra, serves to more brightly illuminate those solar companies that have neither shut down nor received further investments.

Those include thin-film high fliers like Miasole, which was supposed to be raising $200 million over half a year ago, and Heliovolt, which recently laid off employees. Of course, I might as well mention nearly any company currently stuck in the deadly mid-sized startup phase, and I don’t have any special insight the survival chances of those two. The point is that an entire generation of cleantech companies is caught in an unpleasant place right now. By the time the recessionary clouds clear up, many more may well be in Optisolar’s shoes.