Everyone is focusing on how Solyndra wasn’t overseen properly or was an example of government corruption or business mismanagement. That’s not the big point. The real issue is that the federal government is a terrible platform for funding new technology.
First, the reason Solyndra failed was because Chinese production has radically driven down the price of photovoltaic cell solar systems (PV). Solyndra’s projected savings from their innovative cell design weren’t enough to keep up, so they went bankrupt.
Second, the entire solar industry knows that the PV price drop is vital, which is why they are all abandoning the much more costly “solar-thermal” approach (ST) which uses mirror systems to concentrate light on water storage of heat. At current rates, ST systems can generate energy at 27 cents per kilowatt hour versus just 17 cents for PV systems.
That’s why in the past two months, two of the largest loan guarantees offered by the Department of Energy have been abandoned or declined. Solar Millenium AG (
Then, just yesterday, the Department of Energy announced it is giving $737 million (Solyndra was only $535) in guarantees to Tonopah Solar (subsidiary of Solar Reserve) to develop a solar-thermal field in Nevada! Bloomberg even went so far as to say it’s like they’re having a solar Betamax moment, supporting a potentially superior technology that the market is abandoning.
In part, this is because the tiny DoE is overwhelmed with processing these applications. In part it’s because government is not nimble enough to adapt to shifting market situations, especially since the approval process takes a long time. And largely this is because their $40 billion funding mandate expires Sept 30 and they’re rushing like crazy to get the funds out the door before they go away.
So the big story here is how incompetent and wasteful big government funding of new technology looks. The Solyndra thing is a drop in the bucket compared to everything the DoE is hurriedly doing right now.
Bloomberg 09/20/11: “Obama $8 Billion Solar ‘Betamax’ Undercut as
Washington Post 09/26/11: “Some clean-energy firms found US loan-guarantee program a bad bet.” My headline…The Solyndra that wasn’t…
The Hill 09/28/11: “Energy Department approves $1 billion in solar energy loan guarantees” …to solar-thermal companies.
Business Week 09/22/11: “Real Solyndra scandal is
BusinessGreen.com 09/29/11: “DoE hands out $1 Bn in loan guarantees, as Solyndra scandal rumbles on.”