Exclusive Timeline: Bush Administration Advanced Solyndra Loan Guarantee for Two Years, Media Blow the Story

by Stephen Lacey and Richard Caperton

It’s often claimed that the Solyndra loan guarantee was “rushed through” by the Obama Administration for political reasons. In fact, the Solyndra loan guarantee was a multi-year process that the Bush Administration launched in 2007.

You’d never know from the media coverage that:

  1. The Bush team tried to conditionally approve the Solyndra loan just before President Obama took office.
  2. The company’s backers included private investors who had diverse political interests.
  3. The loan comprises just 1.3% of DOE’s overall loan portfolio. To date, Solyndra is the only loan that’s known to be troubled.

Because one of the Solyndra investors, Argonaut Venture Capital, is funded by George Kaiser — a man who donated money to the Obama campaign — the loan guarantee has been attacked as being political in nature. What critics don’t mention is that one of the earliest and largest investors, Madrone Capital Partners, is funded by the family that started Wal-Mart, the Waltons. The Waltons have donated millions of dollars to Republican candidates over the years.

With a stagnant job market and Obama sinking in the polls, the media has decided on a narrative that matches right-wing talking points but not the facts.  For instance, Bloomberg had this incredibly misleading headline yesterday, “Obama Team Backed $535 Million Solyndra Aid as Auditor Warned on Finances.”  If you replace “backed” with “touted,” that would be accurate.  But the headline makes it seem like the White House had decided to give $535 million to a company after an auditor had said it was financially troubled.

You have to read half the story to learn that the loan guarantee was made in 2009 and the audit was done in 2010 after market conditions had sharply worsened! And the Bloomberg story never explains that the company itself raised $250 million from private investors after the supposedly devastating audit!

To set the record straight, Climate Progress is publishing this timeline — verified by Department of Energy officials — that shows how the loan guarantee came together under both administrations. In fact, rather than rushing the loan for Solyndra through, the Obama Administration restructured the original Bush-era deal to further protect the taxpayers’ investment:

May 2005: Just as a global silicon shortage begins driving up prices of solar photovoltaics [PV], Solyndra is founded to provide a cost-competitive alternative to silicon-based panels.

July 2005: The Bush Administration signs the Energy Policy Act of 2005 into law, creating the 1703 loan guarantee program.

February 2006 – October 2006: In February, Solyndra raises its first round of venture financing worth $10.6 million from CMEA Capital, Redpoint Ventures, and U.S. Venture Partners. In October, Argonaut Venture Capital, an investment arm of George Kaiser, invests $17 million into Solyndra. Madrone Capital Partners, an investment arm of the Walton family, invests $7 million. Those investments are part of a $78.2 million fund.

December 2006: Solyndra Applies for a Loan Guarantee under the 1703 program.

Late 2007: Loan guarantee program is funded. Solyndra was one of 16 clean-tech companies deemed ready to move forward in the due diligence process. The Bush Administration DOE moves forward to develop a conditional commitment.

October 2008: Then Solyndra CEO Chris Gronet touted reasons for building in Silicon Valley and noted that the “company’s second factory also will be built in Fremont, since a Department of Energy loan guarantee mandates a U.S. location.”

November 2008: Silicon prices remain very high on the spot market, making non-silicon based thin film technologies like Solyndra’s very attractive to investors. Solyndra also benefits from having very low installation costs. The company raises $144 million from ten different venture investors, including the Walton-family run Madrone Capital Partners. This brings total private investment to more than $450 million to date.

January 2009: In an effort to show it has done something to support renewable energy, the Bush Administration tries to take Solyndra before a DOE credit review committee before President Obama is inaugurated. The committee, consisting of career civil servants with financial expertise, remands the loan back to DOE “without prejudice” because it wasn’t ready for conditional commitment.

March 2009: The same credit committee approves the strengthened loan application. The deal passes on to DOE’s credit review board. Career staff (not political appointees) within the DOE issue a conditional commitment setting out terms for a guarantee.

June 2009: As more silicon production facilities come online while demand for PV wavers due to the economic slowdown, silicon prices start to drop. Meanwhile, the Chinese begin rapidly scaling domestic manufacturing and set a path toward dramatic, unforeseen cost reductions in PV. Between June of 2009 and August of 2011, PV prices drop more than 50%.

September 2009: Solyndra raises an additional $219 million. Shortly after, the DOE closes a $535 million loan guarantee after six months of due diligence. This is the first loan guarantee issued under the 1705 program. From application to closing, the process took three years – not the 41 days that is sometimes reported.  OMB did raise some concerns in August not about the loan itself but how the loan should be “scored.”  OMB testified Wednesday that they were comfortable with the final scoring.

January – June 2010: As the price of conventional silicon-based PV continues to fall due to low silicon prices and a glut of solar modules, investors and analysts start questioning Solyndra’s ability to compete in the marketplace. Despite pulling its IPO (as dozens of companies did in 2010), Solyndra raises an additional $175 million from investors.

November 2010: Solyndra closes an older manufacturing facility and concentrates operations at Fab 2, the plant funded by the $535 million loan guarantee. The Fab 2 plant is completed that same month — on time and on budget — employing around 3,000 construction workers during the build-out, just as the DOE projected.

February 2011: Due to a liquidity crisis, investors provide $75 million to help restructure the loan guarantee. The DOE rightly assumed it was better to give Solyndra a fighting chance rather than liquidate the company – which was a going concern – for market value, which would have guaranteed significant losses.

March 2011: Republican Representatives complain that DOE funds are not being spent quickly enough.

House Energy and Commerce Committee Chairman Fred Upton (R-MI): “despite the Administration’s urgency and haste to pass the bill [the American Recovery and Reinvestment Act] … billions of dollars have yet to be spent.”

And House Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL): “The whole point of the Democrat’s stimulus bill was to spend billions of dollars … most of the money still hasn’t been spent.”

June 2011: Average selling prices for solar modules drop to $1.50 a watt and continue on a pathway to $1 a watt. Solyndra says it has cut costs by 50%, but analysts worry how the company will compete with the dramatic changes in conventional PV.

August 2011: DOE refuses to restructure the loan a second time.

September 2011: Solyndra closes its manufacturing facility, lays off 1,100 workers and files for bankruptcy. The news is touted as a failure of the Obama Administration and the loan guarantee office. However, as of September 12, the DOE loan programs office closed or issued conditional commitments of $37.8 billion to projects around the country. The $535 million loan is only 1.3% of DOE’s loan portfolio. To date, Solyndra is the only loan that’s known to be troubled.

Meanwhile, after complaining about stimulus funds moving too slowly, Congressmen Fred Upton and Cliff Stearns are now claiming that the Administration was pushing funds out the door too quickly: “In the rush to get stimulus cash out the door, despite repeated claims by the Administration to the contrary, some bets were bad from the beginning.”

What critics fail to mention is that the Solyndra deal is more than three years old, started under the Bush Administration, which tried to conditionally approve the loan right before Obama took office. Rather than “pushing funds out the door too quickly,” the Obama Administration restructured the original loan when it came into office to further protect the taxpayers’ investment.

Stephen Lacey is a reporter/blogger with Climate Progress and Richard Caperton is a senior policy analyst with the energy team at the Center for American Progress.

This post has been updated.

44 Responses to Exclusive Timeline: Bush Administration Advanced Solyndra Loan Guarantee for Two Years, Media Blow the Story

  1. Jeffrey Davis says:

    Ain’t corporate media shills grand?

  2. SecularAnimist says:

    Hey, I would have invested in Solyndra if I’d had the opportunity at the time. Their technology was, and is, great. I hope that someone else will pick it up.

  3. Tim Kelly says:

    I attended an event at a Pittsburgh solar supplier/installer on the day that Solyndra closed its doors. It was ironic that the most impressive installation on Burns and Scalo’s roof was the one from Solyndra. Given its ability to shed snow and wind, it’s a great product. Are there any efforts under way to salvage the design?

  4. Jason says:

    This is the first accurate article I’ve read about Solyndra. I worked there for nearly 4 years, and it blew me away how NOT ONE media outlet was talking about how the Bush admin was really responsible for the loan. Really, Obama’s team just signed the papers and took credit for the whole thing. Unfortunately, that also means he gets all the blame.

  5. Mymy says:

    Thank you for this!

    The reporting on this by the mainstream media is clearly intended to convey the impression that Obama’s administration is incompetent.

    They wish!

  6. Jay Alt says:

    Those are excellent points. But the Bush Administration’s commitment to renewable energy was extraordinarily weak. They never approved a single project application of the types which the 2005 energy bill had authorized. I think that was the case across all types of Renewable Energy.

  7. Marshall says:

    looks like a fossil fuel sponsored assassination of the best in solar

  8. Mulga Mumblebrain says:

    And they have the brazen audacity to call themselves ‘journalists’, their swill-production the ‘truth’ and their morally putrid enterprise the ‘Free Press’.

  9. Mike H says:

    In January 2009, shortly before President Obama took office, Energy officials reviewed the application. They said that “the project appears to have merit” but did not approve the loan, requesting additional information, including an independent market analysis of the company’s long-term prospects.

    So, no, the former administration didnt “advance” anything. They let the normal process run its course.

    Then the Obama adminstration came in and fasttracked this.

    Stephen, you just arent very good at this are you?

  10. soi says:

    Now that’s real journalism. Bravo!

  11. Jon G says:

    Neither are you, obviously. When we finance our business units we push really, really hard for the financing, but there is no such thing as “fast tracking” from DOE or VCs (except in feeding frenzies like the dot-coms). About the only “fast tracking” on the funding side comes from angels who sometimes are just too happy to throw money at something, just not a lot. From what I gather from all I’ve read around this, the loan was made given the information at hand (provided by the company) and the risk analysis available (likely provided by the DOE). Many times these tranches are close run things (to reference some earlier near debacles) and the demise can be spectacular. All-in-all US Si producers got hammered by the Chinese, who have a much better business vision and comprehensive plan in solar and wind. Even the low-cost rising stars like Nanosolar with alternate technologies have been blindsided by the Chinese.

  12. Richard Sequest says:

    Thank you for this and other articles that challenge the right wing’s propaganda machine. Keep up the great work.

  13. Jake says:

    The link to the 1.50 a watt thing redirects to this same article.

  14. Am I naive and pollyannaish to ask whether anyone from the Bush Administration (Bush?) would be willing to verify this timeline in a statement to the mass media?

    What’s to lose by asking?

  15. Tommy says:

    This is an interesting development that isn’t in this timeline. I am guessing because the information may not have come out when this was written.

    [JR: This is in the timeline.]

    ABC is reporting that “The results of the Congressional probe shared Tuesday with ABC News show that less than two weeks before President Bush left office, on January 9, 2009, the Energy Department’s credit committee made a unanimous decision not to offer a loan commitment to Solyndra.”

    This certainly calls into question this article’s claim that the day before Obama was inaugurated they were still trying to get it passed. It also goes on to say some other rather interesting things about this loan. Either way, I think we should investigate the whole thing very thoroughly to see what happened to $500M in taxpayer money.

    [JR: We had been told it was the day before. It was January, as the timeline said.]

  16. Davos says:

    What is wrong about this story?

    It’s weird that people can’t agree on things that actually happened even 2-3 years ago, much less what’s in history books.

  17. Joe Romm says:

    If you listen to today’s hearing, where the whole thing is being discussed with the head of the DOE loan office and OMB, then you’ll see that the Bush DOE pushed to get the loan out, the loan committee remanded the loan back for more due diligence ” without prejudice.” Not a very big surprise given that this was the 1st loan being pursued under the loan program which itself was launched under Bush. Note: I’m not here to defend every loan DOE made. Just that the process was an open and non-partisan one.

  18. Jeff says:

    This is so intellectually dishonest it’s frustrating. I’m a big proponent of solar PV and the domestic PV industry, and I’ve spent a lot of time giving people information about the strength of the U.S. industry in many PV market sectors. When Solyndra went under, a lot of people in the industry were discouraged, but like I’ve said many times it was not a surprise. Cost pressure from China and Taiwan was predicted to have a negative effect on domestic manufacturers in 2011 by industry analysts. The only reason Solyndra garnered so much media attention was because it was federally backed. Many domestic manufacturers are opening plants and expanding operations, while we’ve also seen many industry failures and plant closures like Solyndra. It’s just an indicator that the domestic industry is having trouble competing with China – and to be honest what manufacturing industry isn’t?
    When the Solyndra thing first went public, progressives did what I just did, in one form or another – we tried to communicate that it wasn’t all that unexpected and it was by no means an indication that the solar PV industry is floundering. It’s so, so disingenuous and misleading to then switch tactics and blame republicans. It just goes to show that progressives are just as eager as conservatives to put partisan spin on issues that don’t need to be. You can’t just start out saying “Solyndra going bankrupt isn’t actually that big of a deal” then switch to “OK but even if it is a big deal, don’t blame Obama blame Bush.” I stand by my original defense of the PV industry and PV technology in general, but I’m against the progressive blogosphere on this one.

  19. Davos says:

    This is a very comprehensive time-line.

    Makes you wonder why they tried to bring it up in the waning days of the administration anyway…because it was clear that Bush wasn’t going to get praise for doing so from certain sectors of the media. As it is, there’s probably some ‘scrubbing’ going on here and there where websites that nailed Bush on not advancing Solyndra hard enough, etc.

    You are right that one part of the DOE openly advancing a loan project, and another part of the same rejecting that application, does indicate an open and fair process of the whole. It would be different if both sides of the coin were pushing the loan.

  20. Joe Romm says:

    The Bush team was widely criticized for failing to get out a single loan from the program. So the senior folks, we’re told, really wanted to move it out before Obama became President. The review committee slowed it down, understandably. They wanted more due diligence. They got it and approved it. This was always going to be a risky loan because it was for manufacturing — but then that was the point of the loan guarantee program, to do stuff that was riskier than the private sector might. We’re not saying this was the greatest loan in the world. But it was clearly the loan that the Bush folks thought was the most ripe.

  21. Davos says:

    Thank you for the timely analysis and journalism. If this was the ‘most ripe’ project, in a way it seems a ‘good’ thing that none of the others made it to fruition. But, you gotta start somewhere.

  22. Greg says:

    @ Jeff.


    And I agree. Falling into the same old partisan trenches does NOTHING to really help the environment, or have a meaningful discussion of what is affecting the PV market.

    Whatever wild speculation can be made about the Bush administration advancing the Solyndra loan entertaining this kind of finger pointing only validates the point of view that solar power is a political issue. I don’t think it should be. I think alternative energy should supersede petty politics.

    I guess if you want to pat yourself on the back, then maybe coming up with a timeline that shows the republicans have to share the blame… well that seems pretty hollow to me. Share the blame for what exactly? Why is there blame? The economy is tough? Businesses fail all the time. The government made a loan based on the potential for success. Every loan involves risk, but the rewards in terms of supporting innovation and creating a new industry on our own soil often times merit that risk.

    And the government profits from hundreds of thousands of loans every year, to the point that it far offsets any losses.

  23. Alex says:

    I think Greg and Jeff are missing the point that Republicans are making it a political issue. To not pushback would be political nonfeasance, and lead to the same results such nonfeasance lead to as we can see in Congress today.

  24. Alex says:

    Just look at the current headline on the NYT web site:

    “Republicans Suggest White House Rushed Solar Loan”

  25. Greg says:

    Newspaper headlines are meant to sell papers.

  26. Alex says:

    Exactly, Greg. You think Republicans don’t calculate what they’re doing to make headlines? Republicans have got them a new chew toy, and they’re going to milk it. They loved it when all the stories simply concentrated on a Obama-based political scandal type of story, and that’s what they’re going to try to keep going.

    And yet, you’re crying that CP is trying to be political and shouldn’t point out the real timeline of events (or the fact that many of the investors were indeed Republicans) so as to keep solar PV a nonpolitical event. Unfortunately, the Republicans have made it a political item, and it serves three purposes:

    1) they’re against green technologies,
    2) they’re against the government being involved in strategic infant industries (despite the fact it has served the country well in the past with railroads, communications, etc)
    3) and they want to make into a talking point to further tear down their fun punching bag, the President.

    And you want to sit back and sip tea.

  27. Troy says:

    “I hope that someone else will pick it up.” … wouldn’t surprise me if they either were a Republican or had Republican backing ..

  28. Nobody says:

    Was this a 1703 or 1705 loan guarantee? If the latter, when was the switch?

  29. as i read this story i could not help but feel the elephant in the room is the phrase, ‘the Chinese’ a term commonly used to describe US global corporate interests operating not only in China but as China without regulations and protections of basic human rights, legal constraints or virtually any other constraints of the rule of law in democratic nations. GE and Shell specifically and GE’s first solar plant to open last spring, amidst the big fake debt crisis, plans to use to it’s advantage the specific technology solyndra was poised to capitalize on. this is a well planned global corporate takeover intended to strangle any hope of free market energy and let the investment done here in the united states feed the energy monopoly of massive corporations thinly disguised as CHINA.
    great work as always!

  30. Lydia Bezou-Hojnacki says:

    Nowhere does the article say what PV stands for. I assume it’s photovoltaics, but how many people know that? The writer could have placed (PV) after the first mention of photovoltaics! Or is my assumption wrong? I combed through the article several times to look for the meaning of PV…………

  31. Michael Spencer says:

    Yes, it’ll be a company that owns GOP people, they’ll offshore the manufacturing, and funnel all the profits through a tax haven.

  32. Joe Romm says:

    Fixed. Most CP readers know PV, but it is always a good idea. Thanks.

  33. elizabeth says:

    Thanks Alex for bringing discussion back on point. I fear the misinformation of the fox-like media is taking its toll, and SO needs to be fact-checked and brought to light.

  34. Jim V says:

    Facts do not cease to exist because they are ignored. – Aldous Huxley

    The White House is scrambling with advance copies of Ron Susskind’s “Confidence Men: Wall Street, Washington, and The Education of A President” in hand.

    Democratic strategist James Carville recommends “panic” and firing the White House staff.

    Bush was an idiot but President Obama is the worst President since Jimmy “Malaise” Carter.

    Meanwhile, Wall Street loves our president; they say, “Leap” and he says, “How high?”

  35. ithappens says:

    Isn’t this how all “successful” companies succeed now days. As someone pointed out one of the big corporations who were patiently waiting will snatch up this business and take it overseas, that’s how they get government funding for developing new businesses then taking the jobs overseas, right?

    I would like to see a follow up story after all the bashing, accusing and spot lights are over–just who gets the remains of this company and where they take it.

  36. Crissa says:

    …And then the GOP will complain about giving technology to terrorists, but do nothing to enforce the law.

  37. Crissa says:


    What Wall Street likes Obama? Citation, please.

  38. Crissa says:

    You do know that ‘ripe’ and ‘best ROI’ are not synonymous, right?

  39. Crissa says:

    In 2011 someone predicted that pressure would hurt the industry? Aren’t predictions in 2010 and 2011 a bit late for a loan given in the first half of 2009?

    Duh. Or are you saying we should just never try to compete with Chinese manufacturing?

  40. Crissa says:

    Wait, you’re saying whether it’s one week or another, a change which wouldn’t change the order of the actions, brings this article (but not the other!) wholly into doubt?

    Why? Isn’t this pretty easily verified for someone with more than the Googles?

  41. Pythagoras says:

    A couple comments and questions, Joe.

    First, if this timeline is going to accepted there needs to be better documentation of the loan application and granting process and the outcome at each step in the process. The timeline is useful but it cannot be independently verified with the information that is posted on the site today. And unless that information is made available, the debate degrades into a “he said/she said” argument.

    Second point, I think that those who are in favor of industrial policy towards renewable energy and conservation action are missing an important argument being raised by conservatives in that Solyndra can be used as an example of what happens when government picks winner and losers in the marketplace. To those on the outside, it is easy to create a narrative that the Solyndra technology was chosen solely based upon political cronyism. From a political perspective, this argument can be used to justify further cuts to energy research and development. Considering that every other country in the world has an industrial policy favoring renewables, this would be exactly the opposite action required to maintain US competitiveness.

    Which leads to my question, one would expect that the thin-film technology that Solyndra developed would see economies of scale, i.e. rapid decrease in costs as manufacturing volume increases. So does the technology behind Solyndra hold promise for being competitive if it is manufactured at scale? If it does, then this story becomes one of the company solely being under-capitalized– which is what happens to start-up companies all the time. If the technology still have potential to be cost competitive, there would be justification for US government policies–tax subsidies, feed-in tariff rates, etc–that would bring the company to the point of cost competitiveness.

    The US if VERY good at basic research but it is VERY poor at scaling technology to the point of economic viability. Is there an argument that the failure of Solyndra is in fact an outcome of the lack of US industrial policy?

  42. April says:

    Yes, who gets the Intellectual Property (IP) now that they are bankrupt? Will a dirty energy company like BP buy it up?

  43. Bill Weaver says:

    (See Solyndra LLC, Case No. 11-12799, U.S. Bankruptcy Court, District of Delaware) — The company is in a restructuring chapter 11, which means they are just looking for any buyer / investor who can inject enough cash into the organization to allow them to continue operations. From a look at the case, they are underwater by about $100 million. If they are successful with the reorganization, the company may emerge from chapter 11 as a viable concern, but given that this is tied in to all sorts of other problems like the European debt crisis, I’d say they may end up in liquidation…the problem is that the cost of their units was just too high to be priced competitively under these market conditions — a flood of solar panels on the market and drying up of demand partially due to reduced European subsidies for solar…

  44. Bronwyn says:

    An argument is being made that the Obama administration is corrupt for having made that loan.

    A fair and equitable answer to that argument is that both the Bush and Obama administrations wanted the loan made.

    Another argument is being made: that solar is crap and green jobs are a myth.

    A fair and equitable answer to that argument is that one manufactury going under in this economy when it has to compete with Chinese solar is not a big deal. Let’s look at the whole DOE renewables portfolio. But you can’t say things like “DOE renewables portfolio” in the news today, or people’s eyes glaze over. “DOE renewables portfolio” can’t stand up against OBAMA CORRUPT SOLAR BAD RAMA LAMA SOCIALIST DING DONG BOOM!