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Solyndra is a big deal
November 2, 2011 - Mike Maneval
The collapse of solar technologies manufacturer Solyndra portends to be a major economic and energy-policy story and a source of some doubts about the competency of the Obama administration for years to come - I certainly expect that this will not be the final time I write about it, at least.
The website of Forbes magazine has been excellent in providing comprehensive coverage of the Solyndra scandal, from a variety of perspectives and with clear observations illustrating the troubling nature of the relationship between the federal government and the failed solar technologies manufacturer.
In late September, Forbes writer Todd Woody reported the planned resistance of Solyndra's CEO and chief financial officer to forthright transparency before a congressional committee, with the two planning to invoke their Fifth Amendment rights and, in the words of a Solyndra press release to Woody, "unable to provide substantive answers." Woody also reported earlier in the month on Solyndra's plans to prioritize repayment of venture capital speculators ahead of repayment of taxpayers.
Tim Worstall, of the Adam Smith Institute, made a strong case in mid-September that the decrease in silicon prices that left Solyndra falling behind solar manufacturers who use greater quantities of silicon in production was entirely predictable. Worstall observes increased investment in silicon production in the wake of an earlier increase in prices was documented and easily anticipated.
And yet, Jesse Jenkins, Devon Swezey and Alex Trembath, all of the liberal think tank Breakthrough Institute and also writing commentary for Forbes, make a strong case that Solyndra is an exceptional case, and that the loan guarantees offered by the Department of Energy are, as whole, successful. Solyndra's federal loans, Jenkins, Swezey and Trembath note, account for about 2 percent of the department's loan portfolio, and that many of the competing businesses in the solar field outperforming Solyndra are foreign enterprises subsidized by the Chinese dictatorship.
While Worstall's observations on the Solyndra management's inability to anticipate basic principles of supply and demand and the company management's arrogant and secretive behavior in the wake of its collapse leave me more cautious about the sort of direct loan guarantees and assistance advocated by Jenkins, Swezey and Trembath, I still agree with their conclusion that when it comes to innovation and development of renewable energy sources, "if we walk away now, America will lose out on one of the greatest economic opportunities of the 21st century."
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