Southern California environment news and trends

How baseball explains Solyndra's bankruptcy and Energy's loan guarantees

For renewables boosters at the National Clean Energy Summit, the news yesterday that Bay Area-based Solyndra is going under stretched out the discussion about the value of government loan guarantees and other incentives for another day. Perhaps not in the way the most avid cheerleaders would have desired.

Solyndra's bankruptcy announcement put me in mind of the tortured and extended metaphor Energy Secretary Steven Chu used in Vegas Monday as he extolled the virtues of going big or going home in funding energy innovation. Chu talked about the kinds of projects in which the federal government invested as recently as 5 years ago. "We weren't swinging from the heels enough," Chu said. "We were investing in incremental things - singles - but a home run could really change the whole landscape of energy technology. It's really too early to tell whether we actually have home runs, but we see a number of people rounding second base."

Chu went on to say, essentially, that for his money, swinging and missing wasn't the problem. The problem, he says, is swinging at the wrong balls. Which, to keep the metaphor going, means there's three big questions, or, uh, strikes, if you would, even if you accept Chu's definition of terms:

  1. What kind of pitches should the federal government and the Department of Energy swing at? 
  2. Should DOE have swung at the ball that was Solyndra?
  3. Who's actually rounding second? 

(In case you can't tell, I ain't hating on the metaphor. I love torturing a metaphor well beyond recognition almost as much as Chu does.)

My newest colleague here at KPCC, Matt DeBord, over at his shiny-new blog - the DeBord Report - is very interested in the first question. (Check his post out - I love that he thinks infrastructure could be the silver bullet for southern California's economy. I have no idea whether or not he's right, but the banner of infrastructure is heavy, and I'm happy for him to help hold it.) Matt has also written about the difficulties of scaling green energy investment up. He cites the Brookings study. At NCES, they were in love with studies from Duke University in 2008 and 2010. Who is most interested in whether they're interested in a piece of the elephant, or more?

I'm coming off a visit to Brightsource (itself a loan guarantee recipient) where I talked to union guys who say that a lot of green jobs are just the same as old school construction jobs. Who say, the peak employment on that company's Ivanpah plant is longer - and therefore better - than simpler projects' peak employment opportunities. Where company leaders say much of the push for their project came from a state mandate for renewable energy as a portion of a utility's portfolio. In which case, we may be straddling two divergent futures: one, driven by state clean energy standards and federal funding boosts, and the other, our established, tested patterns. Maybe projects like Brightsource/Ivanpah are not moving the needle enough. But is something moving the needle at all better than nothing? 

The second question is interesting because Solyndra's shuttering has renewed questions about the wisdom of its massive Energy Department loan guarantee - the first the DOE offered back in 2009. Solyndra's sizable loan guarantees have been questioned from the get-go. “This is going to be held up as a cautionary tale if things don’t work out for Solyndra. People are watching very closely from all angles," Shyam Mehta of GTM Research said to iwatchnews back in May. To torture Chu's baseball metaphor even further, if this is gonna turn into the loan guarantee program's equivalent of the 1919 Chicago Black Sox scandal, the timing couldn't be worse for the industry or this administration, days before the President wants to announce a new focus this fall on the government making jobs for people with programs like this one. 

Like just about everybody, my problem is that I don't yet have enough information to evaluate the deal well enough. I guess I have a hard time figuring out what all this means without a good answer to Chu's third question: who the hell is rounding the (metaphorical) second base and how can anyone tell?

 

(Photo by Pool/Getty News Images.)

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