It was one year ago this month that the solar manufacturer Solyndra filed for bankruptcy, defaulting on a $535 million federal loan. The company’s name has become Republican shorthand for crony capitalism and the left’s green lunacy.
But the Solyndra story is not a scandal. It is an inevitable bump on the road to a clean-energy economy. And almost everything Americans think they know about Solyndra is wrong.
For starters, this story has bipartisan roots. President George W. Bush signed the bill launching the Energy Department’s loan program in 2005, and his administration selected Solyndra from 143 applicants for the first loan.
The deal almost closed during Bush’s last month in Washington, but the department’s career staff delayed it, saying the loan “appears to have merit” but wasn’t quite ready. Bush aides had given so many assurances to Solyndra’s CEO that they apologized.
Solyndra was not some fly-by-night operation; it was once the toast of Silicon Valley. It had raised $1 billion from elite investors — not just George Kaiser, an Obama bundler, but the Waltons of Wal-Mart fame, Republican donors and the British mogul Richard Branson.
And its slogan, “The New Shape of Solar,” was more than marketing fluff. Most solar panels look like tinted windows. Solyndra’s looked like ladders for lizards. Most panels harvest sunlight with silicon wafers. Solyndra’s relied on a metal mixture called CIGS etched onto elongated glass cylinders. They were unusually expensive, but they clicked together like Legos, which made installation a breeze and helped keep down costs.
The loan program was designed to help companies like Solyndra cross the so-called Valley of Death for risky technologies. The goal was not only to create green jobs, but to reduce our dependence on foreign petro-thugs, our carbon emissions and our vulnerability to energy price shocks.
Helping Solyndra build a factory was expected to create 6,000 construction jobs, 1,800 permanent jobs and enough solar panels to replace a coal plant every year.
Matt Rogers, the Obama administration official who took over the loan program, says he never felt an iota of political pressure to approve Solyndra. Republicans later subpoenaed 300,000 pages of administration documents, and they never found any evidence of politics behind the decision to award the loan.
Solyndra built its factory on time and on budget, which helped reduce the cost of its panels. Its revenues soared, as it attracted customers like Frito-Lay. But silicon got unexpectedly cheap, so Solyndra’s financials evoked the old joke about losing money on every sale and trying to make it up on volume. The company also made some strategic mistakes and ran out of cash before a new management team could turn things around. Eventually, the Energy Department withdrew its lifeline.
But all lenders make bad loans. Obama’s stimulus package reserved $2.5 billion for Solyndra-style busts. A review led by a Republican financier found that the portfolio — which includes the world’s largest wind farm, a half dozen of the world’s largest solar farms and America’s first cellulosic biofuel refineries — is doing fine.
Overall, the stimulus poured $90 billion into clean energy, when the U.S. had been spending just a few billion a year, and it’s launched a quiet green revolution. We’ve doubled renewable power; with help from the low silicon prices that killed Solyndra, solar installations have soared 600%. The stimulus has jump-started the smart electric grid and created a new domestic battery industry for electric vehicles.
It won’t all pan out — that’s the nature of investment. Obama is betting on clean energy, putting public dollars into thousands of firms that can help move us away from fossil fuels. The market is picking the winners and losers, and Solyndra was one of the losers. But there’s nothing scandalous about that.
Read more at NY Daily News
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