recommended reading

Solyndra: 'Bad bet or the tip of the iceberg?'

As Washington policymakers point fingers over the failure of a single federally backed solar company, the entire renewable-energy industry could end up being the big loser.

A House investigations subcommittee on Wednesday held the first of what will be at least two congressional hearings on the $535 million federal loan guarantee the Energy Department green-lighted in September 2009 for California-based Solyndra. The company's top executives are expected to testify before the same panel on Sept. 23. Solyndra, which President Obama once portrayed as a prototype of renewable energy's potential, is now spiraling into bankruptcy and facing an FBI probe.

Top officials from the Energy Department's loan guarantee program and the White House Office of Management and Budget testified Wednesday, noting that the loan process for Solyndra dated back to the George W. Bush administration. They also argued that a single failing company is not emblematic of the value of government loan guarantees to other renewable energy firms.

The White House echoed that testimony. "As the Department of Energy has made clear, they have always recognized that not every one of the innovative companies helped would succeed, but we can't stop investing in game-changing technologies that are key to America's leadership in the global economy," said White House spokesman Eric Schultz. "While we are disappointed by this particular outcome, we continue to believe the clean energy jobs race is one that America can, must and will win."

But the optics alone surrounding Solyndra, including the congressional hearings and questions about the White House handling of the case, could further depress a renewable energy industry already enjoying only limited support in Congress.

"Is Solyndra one bad bet or the tip of the iceberg?" asked House Energy and Commerce Committee Chairman Fred Upton, R-Mich.

In 2009, Solyndra was the first company to receive a federal clean-energy loan guarantee as part of the stimulus package.%C2%A0 The Fremont, Calif.-based maker of solar photovoltaic systems then received photo-op visits from Obama, Vice President Joe Biden and Energy Secretary Steven Chu, all touting the job-generating potential of solar and other renewable energy industries.

But on Aug. 31, Solyndra shuttered operations, laying off its 1,100 workers while seeking Chapter 11 bankruptcy protection.

Most clean energy experts and investors say Solyndra's demise was an anomaly, not indicative of the health of other renewable energy companies. Solyndra sold an unusual type of solar panel that ultimately did not succeed in the global markets.

But Solyndra's impact in Washington could be another story.

"It could have a very significant adverse implication as it relates to the continuation of federal financing for clean energy," said Michael Schwartz, CEO of New Wave Energy Capital Partners, an energy investment and strategic advisory firm. "This bankruptcy will be used by the opponents to justify not supporting any new federal financing for clean energy."

House Republicans have already passed legislation axing most of the federal government's support for renewable energy, and the Solyndra saga will only strengthen Republican hands. In addition, Energy Department funds for renewable energy loan guarantees expire at the end of this month.

One of the GOP's few vocal supporters of clean energy, Rep. Brian Bilbray, R-Calif., lamented Solyndra's failing in Wednesday's hearing. He said the government needs to be more careful in vetting loan guarantees, but should not use Solyndra's bankruptcy as a reason to end support for renewable energy. "It needs to be driven by science and a good investment, not by the assumption that whatever is renewable is going to be great," he said.

Threatwatch Alert

Stolen laptop

Wireless Heart Monitor Maker to Pay $2.5M Settlement to HHS After Laptop Stolen

See threatwatch report

JOIN THE DISCUSSION

Close [ x ] More from Nextgov
 
 

Thank you for subscribing to newsletters from Nextgov.com.
We think these reports might interest you:

  • Modernizing IT for Mission Success

    Surveying Federal and Defense Leaders on Priorities and Challenges at the Tactical Edge

    Download
  • Communicating Innovation in Federal Government

    Federal Government spending on ‘obsolete technology’ continues to increase. Supporting the twin pillars of improved digital service delivery for citizens on the one hand, and the increasingly optimized and flexible working practices for federal employees on the other, are neither easy nor inexpensive tasks. This whitepaper explores how federal agencies can leverage the value of existing agency technology assets while offering IT leaders the ability to implement the kind of employee productivity, citizen service improvements and security demanded by federal oversight.

    Download
  • Effective Ransomware Response

    This whitepaper provides an overview and understanding of ransomware and how to successfully combat it.

    Download
  • Forecasting Cloud's Future

    Conversations with Federal, State, and Local Technology Leaders on Cloud-Driven Digital Transformation

    Download
  • IT Transformation Trends: Flash Storage as a Strategic IT Asset

    MIT Technology Review: Flash Storage As a Strategic IT Asset For the first time in decades, IT leaders now consider all-flash storage as a strategic IT asset. IT has become a new operating model that enables self-service with high performance, density and resiliency. It also offers the self-service agility of the public cloud combined with the security, performance, and cost-effectiveness of a private cloud. Download this MIT Technology Review paper to learn more about how all-flash storage is transforming the data center.

    Download

When you download a report, your information may be shared with the underwriters of that document.