If the praises of high-ranking Obama-administration officials were a viable business plan, the solar-panel maker Solyndra would be an industrial juggernaut. Vice President Biden insisted that the jobs created by the California-based firm would “allow America to compete and to lead like we did in the 20th century.”
In a visit to Solyndra in May 2010, President Obama called it “a testament to American ingenuity and dynamism.” He all but redefined the traditional statement of Americanness to encompass motherhood, apple pie, and the conversion of sunlight into electricity through cylindrical thin-film solar cells, the specialty of Solyndra.
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Obama and Biden were literally invested in Solyndra’s success. The company got a half-billion-dollar federal loan guarantee, the first in a highly vaunted Department of Energy green-jobs program, as part of the stimulus. This was supposed to be the new economic model: government and its favored industries cooperating to lead the country into a green, politically approved recovery.
The showcase firm is now filing for Chapter 11 in an embarrassing blow to the premises of Obamanomics. At least the Obama administration can’t be accused of practicing industrial policy the old-fashioned way and picking winners. It is evidently quite ready to pick losers, too.
A Department of Energy spokesman explained wanly, “The company was considered extraordinarily innovative as recently as 2010.” Innovative, maybe; profitable, no. It had never turned a profit since its founding in 2005. In the still “extraordinarily innovative” year of 2010, it canceled an attempted IPO and axed its CEO.
Plenty of venture capitalists made foolish bets on Solyndra, but the federal government was the most reckless. The Obama administration wanted to throw money at the likes of Solyndra without due diligence, or much diligence at all. In 2008, the Government Accountability Office warned that the Energy Department loan program — created in a 2005 energy bill — had inadequate safeguards.
Nonetheless, within 60 days of becoming energy secretary, Steven Chu put Uncle Sam on the hook for Solyndra. According to the Wall Street Journal, $527 million of the $535 million federal loan has been drawn down, with a bankruptcy court set to determine how much the feds will recover. Chu is fortunate that taxpayers can’t bring shareholder lawsuits against the federal government.
President Bush was flayed for the Enron bankruptcy, based on his tenuous ties to the firm. If the same media rules applied, Solyndra would be Obama’s Enron, given his active promotion of the company and his lavish funding of it. A prodigious Obama-Biden fundraiser is a major backer of the failed concern.
Solyndra’s crash comes during a wave of solar bankruptcies. The government’s enthusiasm for solar power far outstripped that of consumers. Spain provided something of a precursor. It massively subsidized a solar-power industry that collapsed when the government realized its generosity was unsustainable and cut back. One Spanish newspaper had a headline, “Spain admits that the green economy sold to Obama is a ruin.”
China is picking up the pieces. Not only does China coddle solar firms, it inherently is a lower-cost manufacturing environment. Its cheap, simple solar panels are more marketable than the more sophisticated version attempted by Solyndra. Our subsidies for the purchase of solar panels are often used to buy Chinese products. Inevitably, the U.S. solar industry will seek to score the trifecta of government support already achieved by the boondoggle fuel ethanol — subsidizing its production, mandating its use, and barring its foreign competitors.
The stakes in the battle to manufacture solar panels are exceedingly small. Solar power accounts for less than 1 percent of the electricity generated in the United States. The Obama administration’s fervency for it has more to do with the romance of its clean, postindustrial image than with economics. Obama said last year, “The true engine of economic growth will always be companies like Solyndra.” If that were so, it never would have needed half a billion of our dollars in the first place.
I guess they wanted to live by the axiom of "Go big or go home" oops! Thanks guys. The good news is that it's only another $1.60 of debt for every man, woman and child in the Country.
So new manufacturing jobs in states like CA and MA that have among the highest labor costs and the most regulation in the US.
China workers get like $3 per hour, the US plant like $30, the equipment costs the same but the building costs 4X what it does in China. Then the product needs to compete in the market where price is king.
I might go 20% more for a local product on a small thing, but I know buying windows locally or at Home Depot my price difference is less than 10%.
Whoever did the economic analysis for these loans was smoking some strong stuff, because it is obvious that these outfits would get nearly 0 of the market.
“'The true engine of economic growth will always be companies like Solyndra.'” If that were so, it never would have needed half a billion of our dollars in the first place."
C'mon Mr. Lowry, everyone knows that Solyndra's failure is identical to the failure of the "Stimulus" complete with "shovel ready jobs"...the "Stimulus" was not big enough and neither was the "half a billion of our dollars"...we needed to spend more money!!!
Sarcasm to a conservative but truth to the lib-prgressive redistribute the wealth moral mongers...
'The government’s enthusiasm for solar power far outstripped that of consumers.'
Progressive: 'Well, just as with the too-low stimulus, this failure is all the fault of the party of 'no'! If we had regulations to FORCE citizens to use green services, then things would have turned out just great!"(frequently sitting around in the cold and dark is part of shared sacrifice)
The obama boy at GE sent our incandescent bulb production to China so it left us with no production in the US. See, it really does pay to play with obama.
Yes - but Bush was far less connected to Enron and WorldCom than 0bama to this chimera. 0bama gave them all the money they needed to prove the concept and as capitalists already knew the Dem's "new, green economy" is a failure here the same as it is everywhere else. Likewise for all of his other policies.
Even the collapse of Enron did not put a serious dent in the oil industry.
As Enron was collapsing, I was filling up the gas tank of my car every week. The price wasn't even fluctuating that much.
Oil is proven scalable to power the needs of a multi-terawatt economy like America's.
Solar is not. To date, less than one gigawatt of solar power has been installed in the entire U.S. That's a fraction of one percent of America's energy needs. At that rate, you and I will be dead of old age before solar becomes a significant player.
And if solar becomes a significant player, we'll be buying cheap solar panels from China.
Nonsense, they had nowhere near those obligations. More made up stats from the progressive pile of numbers - like 13 million homeless, etc., etc.
But, the issue is not a comparison between Enron and Solyndra, the issue is - where did the money go -
a thorough investigation, as was done to Enron, will most likely find a very big chunk sitting in the Democratic party coffers - there is no way to spend $500 mill in a year and a half on 1100 employees - this is about multiple shadow companies and money laundering in my humble but experienced opinion - those boys who were rubbing elbows with the O knew exactly what they could get away with and they already factored in the debacle - and the who really cares - also factored in. This is criminality and like all criminality, it is ultimately so stupid that it is breathtaking in its duplicity - as in the case of Enron, the difference here is that at Enron, they really did believe their own b.s.
The similarities with Enron abound. Between the Clinton administration's loan for a power plant in India that Indians would buy power from, to the cozy relations between Clinton and Enron chief Ken Lay, and the way the Clinton admin leaned on Indian regional governments to support the useless project, and finally the way the plant bought fuel from distant sources instead of using local coal, it's a mirror image.
>>Inevitably, the U.S. solar industry will seek to score the trifecta of government support already achieved by the boondoggle fuel ethanol — subsidizing its production, mandating its use, and barring its foreign competitors.
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Great stuff from Rich!
Underneath all the financial shenanigans, Enron had numerous profitable business units that were actually profitable, business units that continue to this day serving customers and adding value (eg, Northern Natural Gas).
Solyndra, on the other hand, never made a penny. It was ALL shenanigans...political, rather than financial, but shenanigans just the same.
I used to work for a competitor of Solyndra's. One of the more amusing aspects of the silly chimera that is solar power is the economics of polysilicon, the raw material used to make the shiny stuff on a solar panel. About a year or so ago, a 4'x4'x4' block of polysilicon cost around $25,000, and even at today's modest solar panel production the market is given to shortages and spot price spikes. We have substantial deposits in the US, but so do - you guessed it - the Chinese. So even if we were ever able to hit Obama's fantasyland goals for solar energy production in the US, you'd be hearing the hue and cry for reducing our dependence on foreign polysilicon. Instead of being beholden to Islamic dictators for energy, we could be beholden to Islamic dictators and Chinese communists. Onward to the green energy future!
I don't want to be pedantic; but I think your discussion of polysilicon deserves clarification. Polysilicon is short for polycrystaline silicon. Silicon is one of the most plentiful substances in the Earth's crust; everybody has huge deposits of it. The cost comes in refining it for semiconductor use, and I suspect the $25K block you're referring to is a refined (extremely pure) ingot. These ingots are actually the purest stuff man has ever made. We won't be beholden to anybody for silicon. There are other key dopant elements needed to make silicon photocells (as well as conventional integrated circuits) work; even more so for more exotic, more efficient, non-silicon photo-devices. Of course, the main point is that nobody has found a way to make semiconductor photocells economic on any significant scale.
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