Explaining Southern California's economy

Paul Krugman gets Solyndra slightly wrong

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Solyndra

A Solyndra solar rooftoop installation.

In a great column titled "Here Comes the Sun," the New York Times' Paul Krugman argues that we are on the brink of a solar transformation of our energy economy. Maybe he's right. During the course of proving his point, however, he has this to say about the controversial solar startup Solyndra, which recently went bankrupt and whose funding has brought the Obama Administration under fire:

These days, mention solar power and you’ll probably hear cries of “Solyndra!” Republicans have tried to make the failed solar panel company both a symbol of government waste — although claims of a major scandal are nonsense — and a stick with which to beat renewable energy.

But Solyndra’s failure was actually caused by technological success: the price of solar panels is dropping fast, and Solyndra couldn’t keep up with the competition. In fact, progress in solar panels has been so dramatic and sustained that, as a blog post at Scientific American put it, “there’s now frequent talk of a ‘Moore’s law’ in solar energy,” with prices adjusted for inflation falling around 7 percent a year.

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Fisker electric-car scandal: Is this the new Solyndra?

Biden Announces Conversion Of Idled GM Plant To Electric Car Manufacturing

Jeff Fusco/Getty Images

WILMINGTON, DE - OCTOBER 27: U.S. Vice President Joe Biden speaks at the former GM Boxwood Plant on October 27, 2009 in Wilmington, Delaware. Fisker Automotive announced that the company is buying the plant to produce affordable plug-in hybrid automobiles. (Photo by Jeff Fusco/Getty Images) *** Local Caption *** Joe Biden

The Department of Energy's $535 loan gurantee to bankrupt solar startup Solyndra has become the Obama Administration's first quasi-scandal, with critics insisting that the government shouldn't be funding risky green-energy companies and supporters (myself included) arguing that the government is the only investor that can handle the risk. But now the bickering has spread beyond solar to the go-go world of electric vehicles — just as "Revenge of the Electric Car," the sequel to "Who Killed the Electric Car," is hitting theaters.

ABCNews and the Center for Public Integrity have teamed up to investigate DOE loans guarantees, focusing on two marquee EV companies, Tesla Motors and Fisker Automotive, which together have received about a billion in government-backed financing. The takeaway isn't pretty:

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California has the solar jobs, but will it ever have the solar scale?

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Solyndra

A Solyndra solar rooftoop installation.

Here's some good news for the solar industry, in the aftermath of the Solyndra scandal. The LA Times reports that California is basically SolarLand, USA:

California's solar jobs tally was more than four times greater than runner-up Colorado, which had 6,186 solar jobs.

The Golden State ranked first in the nation for generating electricity from both photovoltaic solar panels and concentrated solar power systems that use mirrors to create steam to run turbines, the study said.

The report goes on to anticipate 24 percent industry growth over the next year, taking the total number of California jobs up to about 50,000 (there are currently about 25,000). 

That sounds great, but as I've pointed out before, will it be enough? No one has really ever questioned that solar is growing as an industry. The problem is one of scale: Can solar ever attract enough investment to rival traditional sources of power generation, particularly super-cheap coal? 

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Darrell Issa leads the Solyndragate inquiry

House Leaders John Boehner And Eric Cantor Arrive On Capitol Hill For Republican Caucus Meeting

Chip Somodevilla/Getty Images

Calif. Republica Rep. Darrell Issa has some questions for Energy secretary Steven Chu.

California's own Darrell Issa has started asking some tough questions in the aftermath of the Solyndra bankruptcy and the ensuing fracas with the Department of Energy's loan-guarantee program. This is from Jake Tapper at ABCNews:

Issa…chair of the House Committee on Oversight and Government on October 7 wrote to Energy Secretary Dr. Steven Chu to see just what other problematic loans might exist.

Specifically, Issa is seeking “additional information regarding the loans approved on the final day of the program,” ones made to First Solar Inc, SunPower Corp., and ProLogis Inc.

“Did DOE have an independent audit of First Solar, SunPower, or ProLogis conducted prior to finalizing loan guarantees for these companies on September 30, 2011?” Issa asked in the letter.”Does DOE have any ongoing concerns about the financial viability of First Solar, SunPower, or ProLogis? In their respective loan applications, did First Solar, SunPower, or ProLogis disclose their cash reserves?”

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Solyndra: The government isn't acting like a venture capitalist — it's acting like a super-venture-capitalist!

I nearly spit my coffee out when I saw this brief CNBC segment on whether the government should be acting like a venture capitalist when it comes to startup energy companies — like bankrupt, scandalized Solyndra. Eamon Javers strikes me as a good reporter, but he zipped through the question and gave me the impression that CNBC hasn't fully figured out what the Department of Energy is trying to do in the renewable energy industry

The DOE just approved two new solar-related loan guarantees, of the sort that Solyndra received (Solyndra got $535 million and drew on $527 of it before declaring bankruptcy). Mesquite Solar got $337 million and Tonopah received $737 — both as the DOE's program was officially winding down. 

Both are also doing some fairly out-there stuff. The Tonopah project, according to the DOE, is a "110 megawatt concentrating solar power tower generating facility with molten salt as the primary heat transfer and storage medium. It will be the first of its kind in the United States and the tallest molten salt tower in the world." Here's a picture of what it might look like and a rundown of how it will work.

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