The furor over Solyndra’s bankruptcy two years after receiving a $535 million Department of Energy (DOE) loan guarantee shows no sign of abating.
The FBI is examining whether Solyndra misrepresented financial statements they submitted to DOE.
House Republicans have used the Solyndra loan guarantee to lambast the Obama adminstration’s "war on carbon-based energy" and so-called exaggerated claims of green jobs the Stimulus bill produced.
In reality, a far more likely culprit in the rash of recent high-profile bankruptcies of solar firms is crushing competition from China, where low wages, generous subsidies and lax environmental standards have made it very difficult for US and EU-based solar companies.
Solyndra had to sell its panels at half its cost to stay in the game, which it ultimately couldn’t win.
Giving the GOP further ammunition, Solyndra executives refused to answer questions at a House hearing. Apparently, Brian Harrison, Solyndra CEO, met with members of Congress as recently as mid-summer painting a rosy picture of how the company was doing, claiming it was on the upswing.
They’ve been all over that, but that kind of public relations language is typical of companies trying to stay afloat.
Stirling Energy Systems Declares Bankruptcy
Yet another young solar company filed for bankruptcy last week, providing confirmation of the tough market Solyndra was trying to operate it.
Stirling Energy Systems, which makes a concentrating solar technology called SunCatcher, also couldn’t compete with rapidly falling solar prices.
In August, Evergreen Solar and SpectraWatt filed for bankruptcy for the same reasons.
Fallout for SolarCity
After being accused of rushing to approve Solyndra’s loan and the hoopla that’s followed, DOE tightened the documentation and reviews required.
Unfortunately, with the September 30 deadline looming (when the program expires), SolarCity fell in the cross hairs. It didn’t have time to satisfy the new requirements.
SolarCity wanted a loan guarantee to support private investments in a project that would have doubled the number of residential solar PV systems in the US over the next five years.
They planned to install 160,000 systems on private military residences, which SolarCity would install, own and operate. The project would have covered 124 military bases in 33 states at a value of $1 billion.
US Renewable Group and Bank of America Merrill Lynch were prepared to provide $344 million in loans to SolarCity, 80% of which would be backed by a $275 million DOE loan guarantee.
First Solar (Nasdaq: FSLR) is another casualty. It too can’t make the September 30 deadline to get a loan guarantee for its 550 MW Topaz solar farm in California, and is in talks to sell the project.
DOE did manage to finalize a handful of loan guarantees last week: $737 million for Tonopah Solar’s 110 MW concentrating tower project in Nevada; $337 million for 150 MW Mesquite Solar 1 in Arizona; $350 million for Ormat’s (NYSE:ORA) 113 MW geothermal plant in Nevada; $105 million for Project LIBERTY, one of the first US commercial-scale cellulosic biomass plants; and $169 million for Granite Reliable Power’s 99 MW wind farm, New Hampshire’s largest.
Democrats and the clean energy industry argue the Republican-led investigation is more about scoring political points than anything else.
"This is not about Solyndra, this is not about the loan guarantee program, this is about Republicans going after the president," says Marchant Wentworth, Union of Concerned Scientists.
China "frequently provides both zero-cost financing, occasionally free land and other kinds of incentives and subsidies" to its wind and solar companies, to capture a market which will be worth trillions of dollars," noted Jonathan Silver, executive director of DOE’s loan program, at a September 14 congressional hearing.
The real cause of Solyndra’s failure is the federal government’s failure to pass an energy policy that will support this vulnerable new industry.
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