"Solar Manufacturer That Received Government Aid Files For Bankruptcy"
When Solyndra, a California-based solar energy company, announced that it was filing for bankruptcy and laying off 1,100 workers at its last factory, it served as the latest example of the troubles American clean energy companies face — and those faced by the Obama administration.
The company, which made solar-cells, received $527 million in government loans as part of the 2009 stimulus, but now Republicans are using its failure to attack President Obama for “wasting” money. The House Energy and Commerce Committee opened an investigation into the government funds the company received because of a link between the company and a donor to Obama’s 2008 campaign. Solyndra was the first to receive stimulus funds from the Energy Department, which has made 40 loan guarantees totaling $18 billion so far.
Energy Department officials cited China’s billions of dollars in subsidies to solar energy companies as one factor threatening American firms. The price of a solar array has dropped, decreasing the profit margins for solar cell manufacturers, while Chinese subsidies have increased rapidly. A chart from greentechsolar compares the government loans provided to Solyndra and its Chinese competitors:
In August, two other U.S. solar energy companies, Evergreen Solar and SpectraWatt, also filed for bankruptcy, and cited Chinese competition as a factor in their financial woes. While the U.S. once dominated to solar energy market, it now makes up 10 percent. “The Chinese have really done an incredible job of eating everyone’s lunch,” said Stephen Simko, a senior stock analyst who covers the solar industry for the Morningstar research firm. “I would assume there are going to be other upstart solar companies that won’t make it.”
But despite Solyndra’s recent bankruptcy on top of the other U.S. companies that made solar cells, Stephen Lacey reported earlier this week that the U.S. has a $247 million trade surplus with China when it comes to solar energy overall — even with China’s massive subsidies for its firms. Solyndra and other start-ups may have failed despite government investment, it worked for other companies, as Lacey points out on Climate Progress:
Due to the successful Treasury Grant Program and Loan Guarantee Program that made it easier for developers and manufacturers to finance facilities, the solar sector grew faster than ever before.
And all that solar — particularly solar PV — brings immense value to the domestic economy.
According to the trade assessment report, around 73% of the value of an installed solar system (equipment, labor, site management) is created domestically. When looking at the total solar-sector contribution to the economy, solar PV represents about 82% of the domestic value, with concentrating solar power and solar heating and cooling representing about 9% a piece.
And these calculations don’t even consider the potential value to the electricity system. A report released in June by three solar researchers found that solar PV offers 15-40 cents per kilowatt-hour in added “value” due to its ability to match peak demand, reduce the need to build expensive transmission lines and provide local environmental benefits.
But whether or not policymakers will recognize these tangible benefits is very uncertain. With basic support mechanisms like the Treasury Grant and Loan Guarantee programs set to expire, and the House set to slash funding for various energy programs, America’s solar trade surplus could close quickly.