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.”
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.”