A green energy company heavily incentivized by Mississippi is shutting down, raising questions about whether the state will get repaid.
Solar panel maker Stion notified the state Tuesday that it would close its Hattiesburg plant Dec. 13, laying off 137 employees.
"Intense, non-market competition from foreign solar panel manufacturers, especially those based in China and proxy countries, has severely impacted the viability of our business," the San Jose, California, company said in a statement released by spokesman Frank Yang.
Stion is the fourth green energy deal made by former Gov. Haley Barbour to flop. Earlier, solar equipment maker Twin Creeks and biofuel maker KiOR went out of business. Electric car maker GreenTech Automotive has ceased production. Mississippi's state government is owed at least $92 million by those companies.
Mississippi initially loaned Stion $74.8 million, and state and local governments have given millions more in other tax breaks and subsidies. The company, for example, owes more than $2.1 million in property tax payments, even though tax rates on the plant are two-thirds lower than normal. Stion agreed to start paying down those bills in May, but Forrest County Attorney David Miller said Stion only made three $75,000-a-month payments.
Clay Chandler, a spokesman for Gov. Phil Bryant, said Bryant was "disappointed" by Stion's shutdown, but said Stion's failure is another example of why Bryant reversed Barbour's policy of investing in startups.
"The governor trusts the Mississippi Development Authority to protect the state's interests moving forward," Chandler said in a statement.
The authority and Yang declined to comment on any talks between Mississippi and Stion. Mississippi already amended its original incentive contract to allow Stion to hire fewer people and make interest-only payments on its debt for a time.
Yang wrote in an email that Stion is trying to sell the factory to another buyer who will keep running it. The proceeds from that sale would go to creditors, in a possible alternative to a Stion bankruptcy filing.
He wrote the chances of selling the plant depend on whether President Donald Trump orders financial penalties against overseas solar panel makers for selling their product at an unfairly cheap rate. The U.S. International Trade Commission is preparing recommendations for what Trump should do, and Yang wrote that the deadline for the president to decide is Jan. 13.
A round of government imposed anti-dumping tariffs on Chinese solar makers improved Stion's prospects somewhat in 2014, leading to an uptick in production. The tariffs being considered now wouldn't be on the kind of solar panel Stion makes, but its facility could be attractive to a foreign manufacturer seeking to produce in an American factory to avoid tariffs.
Stion raised more than $200 million from private investors, in addition to Mississippi's loan. It promised 1,000 jobs in Hattiesburg when it announced its plans in 2011. But the company was already struggling in 2013 when venture capital firm Khosla Ventures took a controlling interest. That's the same company that was the lead investor in KiOR, whose biofuel failure sparked an ongoing lawsuit by Mississippi Attorney General Jim Hood in state court.