As Washington policymakers point fingers over the failure of a single federally backed solar company, the entire renewable-energy industry could end up being the big loser.
A House investigations subcommittee on Wednesday held the first of what will be at least two congressional hearings on the $535 million federal loan guarantee the Energy Department green-lighted in September 2009 for California-based Solyndra. The company’s top executives are expected to testify before the same panel on Sept. 23. Solyndra, which President Obama once portrayed as a prototype of renewable energy’s potential, is now spiraling into bankruptcy and facing an FBI probe.
Top officials from the Energy Department’s loan guarantee program and the White House Office of Management and Budget testified Wednesday, noting that the loan process for Solyndra dated back to the George W. Bush administration. They also argued that a single failing company is not emblematic of the value of government loan guarantees to other renewable energy firms.
The White House echoed that testimony. “As the Department of Energy has made clear, they have always recognized that not every one of the innovative companies helped would succeed, but we can’t stop investing in game-changing technologies that are key to America’s leadership in the global economy,” said White House spokesman Eric Schultz. “While we are disappointed by this particular outcome, we continue to believe the clean energy jobs race is one that America can, must and will win.”
But the optics alone surrounding Solyndra, including the congressional hearings and questions about the White House handling of the case, could further depress a renewable energy industry already enjoying only limited support in Congress.
“Is Solyndra one bad bet or the tip of the iceberg?” asked House Energy and Commerce Committee Chairman Fred Upton, R-Mich.
In 2009, Solyndra was the first company to receive a federal clean-energy loan guarantee as part of the stimulus package. The Fremont, Calif.-based maker of solar photovoltaic systems then received photo-op visits from Obama, Vice President Joe Biden and Energy Secretary Steven Chu, all touting the job-generating potential of solar and other renewable energy industries.
But on Aug. 31, Solyndra shuttered operations, laying off its 1,100 workers while seeking Chapter 11 bankruptcy protection.
Most clean energy experts and investors say Solyndra’s demise was an anomaly, not indicative of the health of other renewable energy companies. Solyndra sold an unusual type of solar panel that ultimately did not succeed in the global markets.
But Solyndra’s impact in Washington could be another story.
“It could have a very significant adverse implication as it relates to the continuation of federal financing for clean energy,” said Michael Schwartz, CEO of New Wave Energy Capital Partners, an energy investment and strategic advisory firm. “This bankruptcy will be used by the opponents to justify not supporting any new federal financing for clean energy.”
House Republicans have already passed legislation axing most of the federal government’s support for renewable energy, and the Solyndra saga will only strengthen Republican hands. In addition, Energy Department funds for renewable energy loan guarantees expire at the end of this month.
One of the GOP’s few vocal supporters of clean energy, Rep. Brian Bilbray, R-Calif., lamented Solyndra’s failing in Wednesday’s hearing. He said the government needs to be more careful in vetting loan guarantees, but should not use Solyndra’s bankruptcy as a reason to end support for renewable energy. “It needs to be driven by science and a good investment, not by the assumption that whatever is renewable is going to be great,” he said.
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This article appears in the September 15, 2011 edition of NJ Daily.