Tag Archives: solar

Business/Economics, Idaho, International, Technology, U.S.

What Economic Recovery? Idaho’s Hoku Materials about to be finished off by lawsuits from unpaid contractors! Lays off 100 more employees in Bannock County!

“The proceeds of the loan are insufficient to pay down current liabilities, resume construction or start commercial operations. The loan proceeds will be used to fund working capital requirements while we plan for a restructuring of our liabilities, and the liabilities of our subsidiary Hoku Materials Inc.”– Scott Paul, CEO of Hoku Corporation

At the end of May, 2012, the CEO of Hoku Corporation basically said that Hoku Materials, in Pocatello, Idaho, has ceased operations, even before it began operations!

I speculated that the 17 May decision to jack up U.S. tariffs on Chinese made solar products would be the final nail in the coffin for Hoku Materials, and it looks like I was right.

This is because Hoku turned to Chinese companies to bail them out of their financial woes.  They became a subsidiary of Tianwei New Energy Holdings, which is an affiliate of China South Industries Group Corporation (CSGC).  All their contracts are with Chinese solar product companies hoping to increase their business in the United States.

On top of that, JH Kelly, primary contractor working on the Hoku Materials project, is finally fed up with not being paid and has sued Hoku.

At the beginning of 2012 Hoku Materials laid off 20 employees (according to an Idaho State Journal report, that left around 150 employees).

In April, remaining construction work was stopped all together (due to the lawsuits).

At the end of May 2012, a local Pocatello TV station started getting phone calls from unnamed sources within the Hoku Materials factory.  The callers were reporting massive layoffs.

Hoku Materials admitted to the local TV station that they laid off another 100 employees, because of massive debts, the increased U.S. tariffs on Chinese solar products, and civil suits by JH Kelly and other contractors!  Hoku is now going through “restructuring”, which usually includes selling off assets to pay debts.

I’ve been warning since 2010 of the impending doom of Hoku Materials.  The sad thing is that officials with the city of Pocatello, as well as Bannock County officials, bent over backwards to get Hoku to build their polysilicon plant in Pocatello (that included essentially giving the land to Hoku, by allowing a tax credit equal to the value of the land). This is because truly good paying jobs have become hard to find locally (no thanks to previous city and county leaders chasing off major employers for personal/religious reasons, such as refusing to allow Union Pacific to make Pocatello their Pacific Northwest Depot!).

Now there’s an unfinished polysilicon factory, taking up space equal to 50 football fields!  To top that, the factory butts up to a residential area, a once dead end residential street is now the entry road to the defunct factory!

NEW Obama imposed U.S. TARIFFS ON CHINESE SOLAR PANELS COULD BE THE FINAL NAIL IN THE COFFIN FOR IDAHO’S HOKU MATERIALS

Business/Economics, Idaho, International, Technology, U.S.

What Economic Recovery? Good and Bad news for Idaho’s Hoku Materials

On March 22, 2012, Hoku Solar (a subsidiary of Hoku Corporation, in turn majority owned by China’s Tianwei New Energy) was selected to build a 7.2 megawatt solar farm in Kaua’i, Hawaii.

In December 2011, Hoku Solar actually delivered a 1.18 megawatt solar energy facility, the largest solar power plant in O’ahu, Hawaii.

After the announcement of the 7.2 megawatt solar farm contract, Hoku Corp stock went up 11%.

Now the bad news, another subsidiary of Hoku Corporation, Hoku Materials, is getting hit again by the construction contractor in charge of completing the southeastern Idaho polysilicon factory.

There are reports that once again Hoku has not fully paid its contractor JH Kelly.  This has happened before, and is part of the main cause for many construction delays in the past.  JH Kelly officials say they are taking “action” against Hoku.

Hoku Materials has also played the same game with electricity supplier Idaho Power.  Their latest battle was settled by an Idaho Public Utilities Commission (IPUC) decision.

According to an 15 March 2012 IPUC statement, Hoku got a new electricity contract which: “… reduces Hoku’s monthly minimum payment to about $800,000 for up to 18 months through June 2013.  To protect customers and the company from the lost revenue from the lower minimum payment, Hoku will reimburse the difference between the current and the revised minimum charge in payments spread through November 2014, plus 6 percent interest.  Hoku will also make an initial payment of $3.8 million, with $2 million of that coming from a $4 million deposit already provided by Hoku. The remaining $1.8 million will be paid over the next 18 months at $100,000 per month.  Hoku must give Idaho Power 30 days’ notice when it plans to exceed 10 MW and six-months’ notice when it plans to exceed 20 MW.”  

HOKU MATERIALS’ CUSTOMERS WHO ‘PREPAID’ ARE GETTING IMPATIENT!

Business/Economics, Idaho, International, Technology, U.S.

Idaho’s Hoku Materials better get its rear in gear, Customers who have prepaid are getting impatient could go elsewhere

“For Hoku and its majority shareholder Tianwei New Energy Holdings, things cannot be worse.”-Rober Dydo, CEO of Solar PV Investor

March 18, 2012, customers who have pre-paid for Hoku’s polysilicon are getting restless.  One buyer, Jinko Solar, has already reduced their original purchase contract of ten years down to eight.  And there’s rumors they want to reduce it even more.

Hoku also owes two other buyers, Hanwha Solar One and Solargiga.  In total the three customers already paid Hoku $140 million!

To make matters worse, Jinko Solar is the only Chinese customer that is not in trouble financially.  This means that Hanwha Solar One, and Solargiga, are more likely to cancel their contracts all together.

To top everything, Hoku Materials, in Pocatello, Idaho, is still not ready for production and the delays are only costing more money: “The current estimate for the cost of facility is now $600 million to complete Phase I of 2,500 metric ton (MT) of capacity. Phase II with the complete capacity of 4,000 MT will cost another $100 million to complete. All told the $700 million dollar price tag is 70.7% more than its previous estimate…“-Michael Lofing, CPA and market analyst

IDAHO’S HOKU MATERIALS LOSES $28 MILLION, BLAMES IDAHO POWER. 

Business/Economics, Idaho, International, Technology, U.S.

Global Economic War: Chinese owned Hoku about to start operations in Idaho. Will U.S. investigation into Chinese solar products put the brakes on Hoku’s operations?

“We believe the Department of Commence investigation will show that Chinese government and Chinese solar manufacturers are, and have been, engaged in illegal practices that threaten to decimate a vitally needed renewable energy industry.”-Gordon Brinser, SolarWorld Industries

After many problems affecting construction and causing long delays, on November 21, Hoku’s CEO, Scott Paul, announced they cleared a milestone in getting their Pocatello, Idaho, polysilicon factory up and running; connection to permanent electrical power supplied by Idaho Power.

Hoku also announced they will now be selling finished photovoltaic modules through a subsidiary called Tianwei Solar USA.  The finished products are made in China, by a company called Tianwei New Energy.  While Tianwei Solar USA is a subsidiary of Hoku Corporation, Hoku is actually a subsidiary of Tianwei New Energy, in China.

Now comes the U.S. Department of Commerce and the International Trade Commission.  They are investigating claims by seven U.S. based photovoltaic manufacturers, that Chinese based companies (like Tianwei, which controls Hoku) are breaking trade laws.

The International Trade Commission will render a decision around December 5.

Now comes China’s Ministry of Commerce.  In retaliation for the U.S. investigation into Chinese companies dumping their finished photovoltaic products on the U.S. market, the China Photovoltaic Industry Alliance claims the U.S. is dumping polysilicon at below cost prices in China!

So, Hoku’s polysilicon production for Chinese customers, mainly their majority owner Tianwei, is being threatened by an investigation by the Chinese government, AND, Hoku’s selling of Tianwei’s photovoltaic products is being threatened by an investigation by the U.S. government!

Hoku is trapped between a rock and a hard place.

WHAT ECONOMIC RECOVERY? HOKU, IDAHO, FINALLY TO START POLYSILICON PRODUCTION?

Business/Economics, Idaho, International, Technology, U.S.

What Economic Recovery? Hoku, Idaho, finally to start polysilicon production, but ongoing delays will cost solar company money

“We are positioned to bring the first 2,500 metric tons of manufacturing capacity online in the coming weeks, and we continue commissioning key systems on site.”-Scott Paul, CEO of Hoku Corporation

After years of continued promises of local hiring and construction delays, due to financial problems, Hoku claims it will finally start polysilicon production within weeks.

However, Idaho Power insists that Hoku pay up front for its electricity, Hoku officials claim they’ve already paid $5.3 million to the utility.  This is just part of a long list of financial problems the wannabe polysilicon maker has had.

It’s ironic that a solar power “products and services” company must rely on an old fashioned electric utility to provide power to run their new 2,500 metric tons of polysilicon factory.

Hoku Corporation has already lost $10.2 million during the second quarter of 2011.  The solar power products company is based in Hawaii.  Their polysilicon Hoku Materials plant is located in Pocatello, Idaho.

Hoku has been getting financial help from a Chinese company; Tianwei New Energy Holdings.

Hoku salesmen oversold their company’s product, and now they’re scrambling to issue refunds, and offer discounts on existing contracts for waiting so long for their product.

All current orders for polysilcon are delayed, no thanks to the financial problems that have delayed construction of the Pocatello plant for the past couple of years.  Expect Hoku to continue reporting losses as a result.

2010: HOKU TURNING TO CHINA TO HELP FINISH POCATELLO PLANT

 

Business/Economics, Idaho

Hoku Turning to China to Help Finish Pocatello Plant

13 October 2010

Hoku Corporation has taken on several millions of dollars in loans, from Chinese banks, in order to finish construction of their Pocatello, Idaho, polysilicon plant.   That’s according to information on Hoku’s website.

Also, Hoku has amended its construction contract with JH Kelly.  A result of delays due to Hoku having difficulty with funding the construction.

Hoku Corp. produces fuel cell membranes, photovoltaic systems, and hopes to produce polysilicon for solar panels at the new Pocatello facility.

Hoku has made several supply agreements with companies based in Asia, but, those agreements hinge on the completion of the Pocatello plant, and, successful demonstration of polysilicon production.  Those agreements have resulted in hundreds of millions of dollars of pre-payments by the Asian companies.

Hoku is hoping to get production started by the end of the year.