Why Did Solyndra Green Energy Company Fail?
1 year ago
Republicans and Obama are getting to the bottom on clean energy loan
More than 1,000 people lost their jobs in August when Solyndra, a Bay Area solar energy company, went bankrupt. Though companies go under all the time, Solyndra is different in that it was one of the first recipients to receive money from the stimulus act in 2009 -- $535 million. Now, the failure of Solyndra is touching off a heated debate about whether the Obama Administration fast-tracked the loan in order to score political points -- even though the loan originated under the Bush Administration. And, investigators from multiple agencies -- FBI included -- are examining the company’s books and questioning their executives. White House officials on Wednesday defended themselves against Republican claims that the administration rushed its decision.
As reported by USA Today,
Excerpts of administration e-mails released by the House Energy and Commerce Committee from late August and September 2009 show that White House officials were anxious about the Office of Management and Budget (OMB) timeline for finalizing a loan to Fremont, Calif.-based Solyndra. Vice President Biden was traveling to California when Solyndra was scheduled to hold a groundbreaking on their new facility, and the White House wanted Biden to attend to tout the project as an example of President Obama's $787 billion stimulus putting America back to work, the e-mails suggest.
Just days before the groundbreaking, the OMB staff wrote in an e-mail that the Solyndra deal should be "notched down" because of a lack of firm performance data on the company's solar panels and "weakening world market prices for solar generally."
As for why the company failed: Authorities are blaming plummeting prices of U.S. solar energy market shares and the weakening European economy -- the biggest financial backer in solar energy. Two other solar companies went bankrupt last month.
Upon investigations, two top executives of Solyndra are expected in Washington next week for testimony, according to the San Francisco Chronicle. They are expected to be grilled about why they assured Congress the company was viable while telling investors and the Energy Department that company revenues were expected to drop.
For myths debunked about how the Solyndra deal went belly up, you can also read this Wonkblog post, which reveals, among other things, why this was more of an exception rather than the rule on green energy loans.