The Phony Solyndra Solar Scandal
He has always been a snake oil salesman; such people always tempt the needy with promises of great things to come. So we will once more hear him tout his policies as creating legions of new “green jobs” while making America the world leader in green energy. We have heard it before. He must either think we are stuck on stupid or he is the one stuck on stupid. This policy has clearly been one giant Green Jobs Con Job.
Another: Reason: Obama’s Green Jobs Failures and Obama’s Green-Jobs Fantasy and The Green Jobs Delusion and The Unseen Consequences of “Green Jobs”: Will investing in clean energy harm the economy?…
NewsMax: Green Jobs Spending Is a Waste of Greenbacks, “If the congressional “supercommittee” wants to cut wasteful spending, the green-jobs agenda is a great place to start.”
And more and more and more and more…
What Really Happened
A very good summary of the whole story, as well as a look into the details of the investment can be found in the Time/Swampland Michael Grunwald story, Big Name Investors Behind Obama’s Failed Green Tech Bet First in Line to Recoup Losses, summary: (read the whole thing)
This is sure to play out as a scandal, but based on what we know so far, it shouldn’t be. Private loans go south all the time. … The Obama administration has made bets on hundreds of clean-energy companies in dozens of clean-energy sectors; some of those bets in its portfolio are bound to go bad, just as Richard Branson picks an occasional lemon. It’s legitimate to question whether the government should have made this particular bet, or whether it overplayed a weak hand, or whether it should be making bets in the first place. But if we’re going to have a clean energy industry in this country, this kind of thing is going to happen. It doesn’t mean anyone cheated.
Background of the company’s failure, from the Swampland piece,
Solyndra’s loan, the first approved under a clean-energy program that was launched during the Bush administration and expanded by Obama’s stimulus bill, was supposed to finance a new state-of-the-art factory for the company’s unique cylindrical solar cells. At the time, Solyndra was an exciting startup; according to the public filings, it attracted big money from bigtime financiers, including $35 million from Richard Branson’s Virgin Green Fund, $57 million from U.S. Venture Partners, and even $2 million from affiliates of Kohlberg Kravis Roberts.
… [later] The biggest problem was obvious; in an industry where prices were plummeting, Solyndra’s product was too expensive. It desperately needed to finish its new factory, which would increase volume and decrease costs. And it needed more sales.
By last November, the company was running out of cash; according to a January 2011 government document, it had “a very high probability” of bankruptcy and liquidation. This was a big problem, not only because the company had drawn down $460 million of its loan, but because its new factory wasn’t even completed, which meant liquidation would be a fire sale. …
The other option was restructuring. Kaiser’s Argonaut Ventures and the Walton family’s Madrone Partners would put up an additional $75 million, which would take the first position in case of a liquidation; the government would still be paid first if the company managed to emerge from bankruptcy. Meanwhile, the Department of Energy … ultimately concluded it did have a potentially viable business. The new factory was on time and on budget. Sales were increasing steadily. And even if Solyndra failed, it would be much more valuable with a completed high-tech plant than with an empty box in Fremont, California.
… “The restructuring gave Solyndra a fighting chance for success,” that same official says. “But then everything fell off a cliff.”
In the summer of 2011, solar panel prices plummeted again. The investors had been poised to inject another $75 million, but this time, they decided not to throw good money after bad. Solyndra shut down and laid off its 1,100 employees.
Investors
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