Xunlight lays off 30 local workers after client fails to pay $5M order

Xunlight Corp. has announced it will layoff 30 local workers.

Xunlight Corp. has laid off 30 workers at its Toledo plant and has stopped paying several executives because it has not received payment for a $5 million order of the company's solar-panel modules.

Chief Executive Officer Xunming Deng said Monday the company also plans to lay off 70 workers from its production facility in Kunshan, China.

The decision leaves 60 Xunlight workers in northwest Ohio and will leave 70 workers at the China plant.

Mr. Deng said four Xunlight executives, including himself and his wife, Xunlight co-founder Liwei Xu, stopped receiving salaries last week.

The cuts came after an Italian customer, whom Mr. Deng declined to identify, delayed payment for an order of 2.5-megawatts worth of Xunlight's thin-film solar panels.

The customer, who ordered the modules in January, has been waiting for Italy's government to finalize a set of financial incentives for the solar industry, Mr. Deng said.

"They have been telling us 'next week' for the last two months," he said. "That just put us in a very difficult situation."

The delay has left Xunlight with a glut of solar modules after the company ramped up its production for the customer, who was scheduled to receive shipments in March, April, and May.

Mr. Deng said the customer is expected to begin making payments once the government incentives are in place, which would allow Xunlight to rehire some of the laid-off workers and begin paying executive salaries again.

"We do not know how long it's going to be," he said.

The company is working to sell its oversupply of solar modules to other customers while it waits for the Italian client's payment, Mr. Deng said.

Seth Masia, spokesman for the American Solar Energy Society in Colorado, said Italy and other European governments considered scaling back solar-industry incentives after the 2008 economic crisis.

While Italy announced "pretty dramatic reductions" for solar aid last year, Mr. Masia said, the country's government is reconsidering the scope of its proposed cuts after it faced criticism from solar-industry supporters.

"Italy, not surprisingly, is kind of dithering about where they're going to go with this," said Mr. Masia, who added that it's unclear when the Italian government will finalize the issue.

If the multimillion-dollar Italian sale goes through for Xunlight, it would represent significant growth for the company. It had sales of $230,000 last year.

The company has projected its 2011 sales will fall between $20 million and $40 million, and it announced in October it was gearing up to handle three major long-term contracts worth $70 million.

Xunlight opened its China facility last year to provide low-cost production, which Mr. Deng said is crucial to help the firm compete in Europe and other growing solar markets.

Contact Sheena Harrison at: sharrison@theblade.com or 419-724-6103.