Solyndra Bankruptcy A Solar Hot Potato

A solar power company’s bankruptcy and its $535 million federal loan guarantee backing by the U.S. Department of Energy, already a political hot potato in this year’s overly charged climate between the GOP controlled House of Representatives and the White House, is heating up more. Solyndra, once touted by President Obama “as part of the U.S. effort to aid development of alternative energy sources,” is the company at the center of this boiling, solar powered pot.

Solyndra, a developer of cylindrical solar systems for commercial rooftops, filed for Chapter 11 bankruptcy earlier this week as a result of what it says is “global economic and solar industry market conditions.” The company, like Evergreen Solar before it, is struggling to compete with a surging Chinese solar manufacturing industry and a rough American recession. In its bankruptcy filing the company said it is laying off 1,100 full-time and temporary employees and evaluating a number of options to keep itself from going completely insolvent, including “a sale of the business and licensing of its advanced CIGS technology and manufacturing expertise.”

Solyndra

image via Solyndra

Even as the U.S. Department of Energy and the Obama administration defended the Solyndra loan backing – which incidentally was also pursued by the Bush administration and saw over $1 billion in private equity put on the line – the House of Representatives’ Energy & Commerce Committee tore into the bankruptcy news with renewed vigor. Calling it a “rat from the onset,” House Energy and Commerce Committee Chairman Fred Upton (R-MI) and Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL) vowed to continue pressing Obama for all relevant information related to the loan guarantee as it investigates what it believes to be a waste of tax payer dollars.

“As the highly celebrated first stimulus loan guarantee awarded by the DOE, the $535 million loan for Solyndra was suspect from day one,” said Upton and Stearns in a statement. “Our investigation to protect American taxpayers has revealed that in the rush to get stimulus cash out the door, despite repeated claims by the Administration to the contrary, some bets were bad from the beginning…Unfortunately, Solyndra is just the latest casualty of the Obama Administration’s failed stimulus, emblematic of an economic policy that has not worked and will not work.”

The DOE, in essentially what is a rebuttal, said of the loan guarantee program that “we have always recognized that not every one of the innovative companies supported by our loans and loan guarantees would succeed, but we can’t stop investing in game-changing technologies that are key to America’s leadership in the global economy.  These projects, which include more than 40 other companies, are on pace to create more than 60,000 jobs.”

I am the editor-in-chief and founder for EarthTechling. This site is my desire to bring the world of green technology to consumers in a timely and informative matter. Prior to this my previous ventures have included a strong freelance writing career and time spent at Silicon Valley start ups.

    • Anonymous

      Geezzzz….nnCompanies fail. u00a0Sometimes because their idea wasn’t good enough, sometimes because their management wasn’t good enough.nnSolyndra seems to have failed because silicon PV dropped in price significantly more than anyone predicted a couple years ago. u00a0 Solyndra’s idea worked given thatu00a0photoelectric materials remained costly, but costs fell very rapidly.u00a0nnTheu00a0Energy & Commerce Committee stuff? u00a0Political game playing. u00a0Everything that President Obama supports and doesn’t pan out will be shouted from the rafters. u00a0Every success will be ignored.

      • Amheating

        If this was left to the private sector it would have never gotten off the ground . No bank ,venture capitalest or private investor nwould ever touch this investment . Yes China built them cheaper but who did they think would buy them anyway . People are nbroke and just trying to survive . The last thing they are going to do is spend $ 40,000 on solar pannels for there home to saven$500 a year . Oboma is clulessu00a0, never ran anything,u00a0u00a0in way over his head and will distroy this country if he gets re elected .

        • Anonymous

          There are three basic levels of funding for new technology/endeavors.nnThose projects which are almost certainly sure things, which should quickly return profits are generally funded by corporations. u00a0By entities whom are very sensitive to next quarter’s bottom line and don’t like to post long term losses while a new idea is fleshed out.nnThose projects which are fairly sure things but will take extended time to perfect are generally funded by venture capitalists. u00a0These are people and groups of people who are willing to take larger risks and wait longer for returns in exchange for large gains from those projects which do work.nnThen there are projects which seem promising but require more help than private money is willing to provide, and for them the government is a common funding source.nnBecause the government is the funder of the least promising one expects a higher failure rate. u00a0We could just refuse to fund those projects and let them die, but often the projects which dou00a0succeedu00a0are quite valuable for the country. u00a0I doubt you couldu00a0identifyu00a0a singly technology which weu00a0enjoyu00a0which was not made possible by government funding. u00a0You certainly are using a couple when you postu00a0commentsu00a0onu00a0theu00a0internet with youru00a0computer.nnNow, what did Solyndra cost us, the taxpayer? u00a0We’re going to be paying off $500 million in loan guarantees. u00a0That’s about 14 hours funding for our oil wars.nnWhile Solyndra was running it provided good jobs for 1,100 Americans. u00a0That’s 1,100 US workers paying taxes and not pullingu00a0underemploymentu00a0checks. u00a0Most of that $500 million flowed back into our economy and helped us from falling further into the Bush Recession hole. u00a0So, in reality, not lost.nnAnd even if it was all lost we’re talking about less than $2 per person. u00a0Not the big money that people pretend it to be. u00a0nnWe bet small money on a technology which could have given us lots of good US jobs had it worked. u00a0In my book that’s a lot better than sitting on our hands waiting for the economy to somehow recover on its own. u00a0nnYou want to destroy America? u00a0Turn control back over to the people who work to make the rich richer and screw the middle class.nnYou see a single job program out of this Republican House of Representatives? u00a0Absolutely not. u00a0All they want to do is to cut taxes onu00a0theu00a0rich and eliminate u00a0programs u00a0which u00a0protect us if we hit a rough patch.nnYou think eliminating the minimum wage and doing away with worker safety rules is going to make your job better? u00a0 u00a0Wrong you’ll be working 60, 70, 80 hour weeks for half the salary and lucky to get out with all your fingers. u00a0If you don’t work the hours and take the salary cuts there will be plenty others who will take your place.nnUnless your net worth is greater than ten million you are in the class that ‘s getting crapped on by the rich.

      • Anonymous

        please point to a success

        • Anonymous

          Computers, the internet, air travel, railroads, interstate highways, modern medicine, cell phones, modern agriculture – just about any technological entity you can identify.nnAs those technologies were nurtured there were many research projects which produced nothing, many companies which failed.nnIt’s what happens when you innovate. u00a0You try ideas that look like they might work, fully understanding that some won’t. u00a0You progresses because some of the ideas are winners and drive the process forward. u00a0 Even failures sometimes have value as they introduce new, more promising ideas.nn