I've been going big on Solyndragate here at DeBord Report. It's a good story. It has everything: ideas about the future, money, politics, success, failure, Silicon Valley, Washington — and it's sucked in the Obama administration. It's also generated a lot of discussion and debate in the blog-o-sphere about both the specifics of the solar startup's abrupt bankruptcy and the role of government in financing green energy projects. Here's a rundown of what I've written so far:
Think the Department of Energy is bunch of meek bureaucrats? Think again. It's a den of super-venture-capitalists who have been building up the thin-solar industry in America.
When you invest in new industries, you sometimes have to swing for the fences in order to capture major returns.
Meet the $199 Amazon Kindle Fire: “What we are doing is offering premium products at non-premium prices,” [Amazon CEO Jeff] Bezos says. Other tablet contenders “have not been competitive on price” and “have just sold a piece of hardware. We don’t think of the Kindle Fire as a tablet. We think of it as a service.” (Bloomberg)
Megan McArdle on the investment structure of Solyndra: "…I am distinctly prejudiced against plowing half a billion dollars worth of government funds into a company to see whether they can finally get their manufacturing process to work." (The Atlantic)
Fox goes to court to prevent the Dodgers from selling TV rights: "The suit asks that the court reject any such sale except in accordance with the current contract, under which Fox retains exclusive negotiating rights through November 2012 as well as the right to match any other offer." (LAT)
The Solyndragate feeding frenzy continues. There's blood in the water. The companies two top executives have taken the fifth in Congressional testimony. The Washington Post has done an expose. The New York Times has done an expose. The LA Times has done an expose after the Post and the New York Times did their exposes. Republicans are making plenty of noise about how Solyndra was somehow a corrupt undertaking designed to funnel taxpayer money to Obama supporters. It was also a stimulus boondoggle. And in California, it was a risky bet on precious few jobs.
My KPCC colleague and Pacific Swell blogger Molly Peterson and I have been talking about Solyndra for weeks. She provided a nice shout-out to several of the posts I've written on the topic at DeBord Report — and provided me with an opportunity to zero in on what's really going on with green energy funding.
There's now pretty much a frenzy of Monday-morning quarterbacking going on with the Solyndra controversy. It boils down to essentially two core positions:
- Solyndra was too risky a bet for the DOE to pony up a $535-million loan guarantee. The Atlantic's Megan McArdle has been grappling with this one, in strenuous detail, while somewhat evading the question of whether Solyndra needed to spend as much money as possible in a short period of time, to both achieve economies of scale and outrun a collapse in the price of silicon (Solyndra's solar panels didn't use this material).
- Solyndra was a risky bet, but in the face of $30 billion in Chinese solar investment, the U.S. needs to leverage its innovation advantage to capture its share of the solar market. The government needs to subsidiize some of the risks and be willing tolerate failure in and effort to build up a new Green energy sector. I'm on this side, as is Wired's Jonah Lehrer and the New York Times' Joe Nocera.
At KPCC's Pacific Swell blog, my colleague Molly Peterson has a snappy take on the aftershocks of Solyndragate: SolarCity isn't likely to get a $274-million DOE loan guarantee is was counting on to install solar panels at more than 100 U.S. military bases.
In the post, she refers to a memo that was sent out by the Sierra Club, supporting the solar industry. Here's a taste:
Earlier this week, The Solar Foundation, in partnership with GreenLMI and Cornell University, released its National Solar Jobs Census 2011. The Census reported incredibly impressive growth in the solar industry – nearly 7% from August 2010 to August 2011. The solar industry’s growth is even more impressive when compared with the fossil fuel energy industry, which shrank by 2%.
No one disputes that the solar business is growing. But as Solyndra found out, growth isn't always enough. You also need scale. Because without scale, you're going to have much more trouble attracting high levels of outside investment — enough to match the many billions that governments like China are throwing at their solar industry. And in Solyndra's case, you need to ramp up sales to the point where you can overcome falling prices driven by Chinese manufactures flooding the market with cheap solar panels.