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Troubled solar panel maker Solyndra has announced it will close its first factory to save $60 million in operating expenses, and will lay off 40 workers just seven weeks after opening its second plant, a $733 million facility.

Solyndra CEO Brian Harrison said the new facility is more cost-efficient than the old one, according to the New York Times, which first reported the story. The company has fallen on hard times, in part because of the rising tide of Chinese solar makers that can produce cheaper panels and are challenging American companies for business.

It seems that bets on Solyndra are going sour. The government provided the company with a flagship $535 million Department of Energy loan guarantee for its recently-opened Fab 2 factory and even got a visit from President Obama. In June, the company yanked its IPO filing but still raised another $175 million by selling promissory notes to existing investors.

Cleantech investment is down sharply, and based on what I’ve heard from venture capitalists, it’s because of companies like Solyndra, which have asked for huge amounts of capital but haven’t been able to provide successful exits for investors. Investors are backing away from capital-intensive cleantech now and instead looking to cheaper companies.

They’re also going back to “what we know,” as Mike Dauber, vice president of Battery Ventures, put it to me at VentureBeat’s GreenBeat 2010 conference yesterday. They’re now looking more to cleantech businesses on the IT side of things, rather than pie-in-the-sky concepts and hugely expensive projects that make getting attractive returns tough, if not impossible. An example of that would be Amyris, which is one of the more successful companies playing in the capital-intensive biofuels business. Amyris had its IPO last month and raised $85 million, but only its early-stage investors made reasonable returns.

Solyndra has a hard road ahead in trying to make a product that will beat Chinese prices — if it doesn’t play its cards right, it could leave egg on the DOE’s face and wind up a cautionary tale.

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