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Posted on June 4, 2012 by  & 

Konarka files for Chapter 7 Bankruptcy - What next for OPV?

Konarka, the Massachusetts based start-up and a leader in the effort to commercialize organic photovoltaics, has filed for bankruptcy. Since 2001, Konarka had received over $150 Million in start-up funds and $20 Million in government grants. This is the latest in a series of high profile bankruptcies in the solar sector, with other examples being Solyndra and Q-Cells recently.
The photovoltaic sector has been shaken by fierce competition, not the least from crystalline silicon companies in Asia that manage to produce at very large volume and low manufacturing costs. Even in China there is some consolidation of PV makers.
Looking into Konarka's case more specifically, several issues relating to the company's technology and business plan made the situation ominous for some time. Some of the most important setbacks that Konarka faced related to lifetime and efficiency issues of their OPV, along with difficulties in scaling up production. Those in OPV felt that despite those drawbacks there were market opportunities but volume applications have not prevailed so far with the existing capability set. Several PV technologies can also be flexible, narrowing the unique attributes of OPV.
Under chapter 7 proceedings, the company's operations cease and a trustee is tasked with liquidating the company's assets for the benefit of creditors. Creditors will be asked to submit their claims to the Bankruptcy Court and are unable to obtain payment from the company.
Howard Berke, chairman, president and CEO of Konarka, said, "Konarka has been unable to obtain additional financing, and given its current financial condition, it is unable to continue operations. This is a tragedy for Konarka's shareholders and employees and for the development of alternative energy in the United States."
IDTechEx's extensive research on the topic of organic photovoltaics allows for some further insight into some of the woes that potentially led Konarka to bankruptcy. One of the most important factors related to claims from supporters of OPV technology that it would be the lowest cost photovoltaic technology that would allow for grid parity much quicker than any other solar technology platform. Cost calculations conducted by IDTechEx and even the most optimistic of roadmaps for technology improvements and cost reductions failed to prove the truth of the statement in the near future, with our in-depth analysis on the topic revealing that such competitive price/performance characteristics would not be realised before 2020.
It is now up to the remaining companies involved in the organic photovoltaics space, such as Heliatek, Solarmer, Eight19 or Disa Solar to continue the effort towards commercialization of organic solar cells. However, we note there is increasingly more activity in OPV in East Asia too. Key for these companies will be to identify the right markets, even if they initially are small, niche segments initially, to transition from investor-funded start-up to a profitable corporation.
Mr. Berke noted that several large international companies had expressed interest in financing or acquiring the company. He further noted that, given the worldwide interest in the company, including from the Chinese government, the company had not entirely given up hope that a rescue financing or acquisition would emerge in the bankruptcy. Under Chapter 7 proceedings, however, any such transactions are evaluated by a trustee and not by the company itself.
This bankruptcy will be a blow for the wider organic electronics sector, which has seen success in OLEDs but other components are coming to market more slowly than expected. IDTechEx believe that the issue is still the lack of complete product solutions on offer - the component push approach is not working.
For more information read our full analysis of the OPV sector at Attend the forthcoming events - attended by adopters of the technology - to hear their needs and requirements:

Authored By:

Principal Analyst

Posted on: June 4, 2012

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