Lots of attention is being paid to the shuttering of Solyndra, a solar company that received federal loans from the Energy Department in the Recovery Act, and took part in a visit by the President last year.
President Obama praised the company, Solyndra, for its advanced technology during a visit last year. But in a statement on Wednesday, Solyndra said its business had run into trouble because of difficult global business conditions, including slowing demand for solar panels, and stiff competition.
The Energy Department, which approved the funding, said China’s subsidies to its solar industry were threatening the ability of Solyndra and other American manufacturers to compete. The price of a solar array, measured by cost per watt of capacity, has fallen 42 percent since December 2010, the agency said.
Two other American solar companies, Evergreen Solar and SpectraWatt, also sought bankruptcy protection in August, and both said competition from Chinese companies had contributed to their financial problems.
Despite this, the domestic solar industry was a net exporter to China on solar PV products. So the notion that US solar is losing everything to the Chinese doesn’t appear to be true. [cont’d.]
Startups fail. They have a high risk. Everyone pretty much knows this. But the demise of Solyndra is not seen as the normal course of business in a speculative high-tech industry – private investors lost twice as much as the federal government on the company – but an embarrassment for the President. Republicans have pounced.
“In an apparent rush to push stimulus dollars out the door, the Obama administration wasted $535 million in taxpayer funds in guaranteeing a loan to a firm that has proven to be unviable in the global market,” said Representative Cliff Stearns, the Florida Republican who is chairman of an investigative subcommittee of the House Energy and Commerce Committee.
He said the Energy Department might have authorized the guarantee because an Oklahoma oil man who was a donor to the Obama campaign, George Kaiser, was an investor in the project. In a joint statement, Mr. Stearns and Representative Fred Upton of Michigan, the chairman of the committee, said, “We smelled a rat from the onset.”
But the Energy Department dismissed that assertion, saying that Solyndra applied for federal help during the Bush administration and that Obama-era officials merely finished the process the Republicans had begun.
More of this style of attack in Politico (where else?). The company did have a lot of political connections: former California state Controller Steve Westly was also involved. But ultimately, this is a garden-variety failure of an emerging technology company, and a bad bet for investors. That’s more the norm than something out of the ordinary in that field. It doesn’t mean this whiff of scandal will go away, of course. But it seems overblown.
UPDATE: Another point made by Think Progress Green: the government loans Solyndra secured are a tiny fraction of what Chinese companies get for their solar operations.