Our editorial board member, Bill Timberman, has a unique ability to research a subject in depth and clearly explain his findings to others. So Democratic Perspective asked him to tell us what happened to Solyndra.
For the complete Solyndra story, I highly recommend that you listen to the program on podcast. However, following are some of the highlights:
Solyndra was founded in 2005 when the silicon needed for solar panels was $400 per pound, a fact that made solar uncompetitive with fossil fuels with regard to price. However, Solyndra developed solar panels that were made of a less expensive, more efficient material. The company also developed a more efficient shape for its panels. As a result, Solyndra panels were 7 percent more efficient and benefited from less expensive installation costs.
By 2007, Solyndra had working prototypes and applied for a federally-backed loan. By the end of the Bush administration, the loan was in the works but had not yet been approved. The company needed a new manufacturing plant in order to compete. But since it didn’t receive the federal loan until 2009-2010, it began having cash flow problems.
Solyndra seemed like a promising company right up until the loan was approved. But almost simultaneously, the Great Recession led to a dramatic drop in the price of silicon which led to the loss in Solyndra’s competitive price advantage. Around the same time, China ramped up production and flooded the world markets with less expensive solar panels.
All of this led to the bankruptcy of Solyndra and its default on the federal loan. Of course, Republicans led by Darrell Issa wanted to turn the failure into a story of crony capitalism committed by the Obama administration.
That proved to be entirely false. Indeed, there were many Republican investors in Solyndra, including the Walton family which controls the WalMart fortunes.
Moreover, not all of the federal money used to back the loan to Solyndra was lost. Of the $530 million loan, the government will get more than $135 million back. The loan to Solyndra represented just 1.3 percent of all of the Obama administration’s loan guarantees for alternative energy. And it was the only failure.
Indeed, Bill concluded that the technology developed by Solyndra will eventually become more viable as the economy recovers and the price of silicon increases.
The show has much more to offer, so please listen to it in its entirety.