The Latest Stimulus Casualty

Oops:

A company that served as a showcase for the Obama administration’s effort to create jobs in clean technology shut down Wednesday, leaving 1,100 people out of work and taxpayers obligated for $535 million in federal loans.

Solyndra, a California solar panel maker, had long been an administration favorite. Over the past two years, President Obama and Energy Secretary Steven Chu each had made congratulatory visits to the company’s Silicon Valley headquarters.

Although Wednesday’s announcement came as a surprise, House Republicans and government auditors had questioned the wisdom of the administration’s loan guarantees to the company, backed by capital from billionaire Democratic fundraiser George Kaiser. In July, a House subcommittee subpoenaed White House documents related to the guarantee, and after Wednesday’s developments, Republican lawmakers vowed to continue investigating.

I take no delight in this. I think solar power has something of a future and feel for the 1100 people who are out of work. However, domestic solar is not competitive — not with China, not with fossil fuels. To make it competitive is going to take a smarter business model than kissing up to politicians and securing loans.

Green jobs may have a future. Government-sponsored jobs don’t.

Comments are closed.

  1. AlexInCT

    This is the at least the third such “green jobs” solar energy company closing shop that I have heard about. The first one, as MY mentioned, was in MA and had recieved some serious stimulus dollars – in the millions – the previous 2 years and was showcased by team Obama all the time (at least out here) whenever they where demonizing fossil fuel power generation. These bozos didn’t get any money this year, and promptly closed their doors and left somewhere over 1000 people without a job too. Without big subsidies none of these companies are viable, and that’s because their products fall far short of what reality dictates.

    And if you are feeling sorry for the people that got laid off, remember the poor idiots that bought these expensive products, thinking they where being all green and doing a great thing, and now are stuck with them and no company to go back to when they break under warrantee. They deserve better even if they where too stupid to know better.

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  2. TxAg94

    That’s a lot of money in loans for only 1100 employees to go bankrupt 2 years later. Me thinks someone got rich off the stimulus. Even if they didn’t take in any money from sales, and each employee made a six-figure salary, there’s still something wrong with the picture.

    I know a lot of small companies who would be THRILLED to get even a $1 million guaranteed loan to boost business and would actually make good use of it. I think giving the company half a BILLION in the first place was criminal.

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  3. CM

    The U.S. solar power market grew a record 67% last year, making it the fastest-growing energy sector, the industry reports Thursday.

    Its market share jumped from $3.6 billion in 2009 to $6 billion in 2010, helped by federal tax credits and declining technology costs, according to a report by the Solar Energy Industries Association (SEIA) and GTM Research.

    Enough solar power was installed last year to power about 200,000 homes, the report says, noting that more than 65,000 homes and businesses added solar water or pool heating systems. In particular, the photovoltaics or solar panel part of the market soared most, more than doubling from 2009.

    http://content.usatoday.com/communities/greenhouse/post/2011/03/us-solar-industry-2010-record-growth/1

    Some people seem to believe that for a technoogy to be “the wave of the future,” it must immediately be available at a high comfort level and low cost. The first cell phone weighed 2 pounds, offered just a half-hour of talk time for every recharging, and sold for $3,995. Not quite cheap or comfortable, and yet they were undeniably “the wave of the future.” The price of solar photovoltaic panels has dropped by a factor of 50 over the past 35 years.

    The renewable energy industry is one of the few doing well in your current economy. Your government also heavily subsidizes fossil fuel energy (even more so than renewable energy, which somehow everyone always neglects to mention).

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  4. loud

    I’m a free market fan myself, and I really don’t know why so many supposed free market fans balk at the success of green technology. Well, I have an idea why…

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  5. CM

    Well people who actually ARE free-market fans would support market-based methods of dealing with market failures. Omitting the emission of carbon IS a gross market failure. The costs are not picked up by any transaction. There are significant negative externalities. But for some reason the champions of the free-market dig their heels in hard and support the subsidising of costs, thereby completely distorting all markets which involve the emission of carbon. Goddamn socialists.

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  6. sahrab

    There isnt a conspiracy of “Supposed” free market fans at work here.

    If you were truly a Free Market fan, you’d understand that the Green Technology isnt being bolstered by the Free Market. You’d know that Green Technology is artificially being kept afloat due to Government Intervention (a’la forcing Tax Payers to pay for a technology that wouldnt be supported by the Tax Payers voluntarily).

    If Green Technology was truly a Free Market player, it would have gone into the tank long before this. We know this as Green Technology barely had a following except for Hairy Legged Hippy Types who Shit into paper bags and pray to Mother Tree. Even with the intervention of the Government largess Green Technology is failing.

    Not only is Green Technology a Free Market failure, and an example of the Free Market at work, it is a Government Program failure as well.

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  7. Rann

    So the plant received a ridiculous amount of money from the government, rather than from investors…

    It closed anyway because it apparently still couldn’t stay solvent even with that massive influx of outside cash…

    But we’re all vicious Holocaust, I mean, Climate Change Deniers who just want to see green technology fail for no good raisin and hypocrites too because green technology is doing wonderfully in the free market despite the fact that this is about one of multiple “green technology” company closures.

    So did you come out of your mother retarded, or was it a condition you acquired later in life?

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  8. sahrab

    So the plant received a ridiculous amount of money from the government, rather than from investors…

    And you I know and understand the difference.

    Free Market/Investor influx of funds = Investors and Private Citizens freely donating their funds, typically based on judgements of demand

    Govenrment influx of funds = Government using Citizens funds (taxes) to fund the technology, even when its not cost advantageous. Typically based on political ideology irregardless of constituents desires for the distribution of funds (taxes)

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  9. loud

    I get what you’re saying entirely. I was talking about the links CM posted, which are successes, even if they got a bit of a push for it. A lot of industries receive government subsidies, and I’d like to see that ended, but the renewable energy industry isn’t growing just because the government is pouring money on it. You think the free market has nothing to do with it at all?

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  10. sahrab

    The only way to tell is to remove the Government from it. The fact the companies are failing, even while being propped up by the Governmnet (via funds) shows the Free Market doesnt support it.

    How much of the Free Market interaction with these companies is because of the Government Money funneling into them? The Investors arent having to risk nearly as much as they would in a true Free Market system, because of the influx of funds.

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  11. Miguelito

    I know a lot of people that have solar installs (tons of chatter on lists at work) and almost every single one only did it because of the fairly large savings due to federal, state (and for some, even local) tax breaks, refunds, etc. Even I’ve looked at solar and honestly it’s just too expensive without a decent payback over time, yet… without said breaks. I’m still on the fence waiting for the cost/production ratio to improve and/or electricity costs to rise more before pulling the trigger.

    When you have to massively subsidize a system like that, it’s not working.

    Businesses will still often do large installs because of the economies of scale in doing it larger, doing things like large installs on rooftops (or so-called “solar trees” in parking lots) where it’s somewhat cheaper then an install on a home, especially when you’re already doing construction work anyway. However, most also do it because they’re also getting tax breaks for it as well. I know we have a lot of panels on some of our buildings now, and it actually does save quite a bit in power costs. We’re talking massive scales over a household of course.

    Oh and Rann: The big brain am winning again!

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