Last Update: 30 March, 2012 | Solyndra is a US based manufacturer of cylindrical panels of CIGS thin-film solar cells based in California. …However, as of September 1, 2011, it has declared bankruptcy, and has stopped all business activity.
The case study of Solyndra provides an interesting example of the complexity developing renewable energy, in terms of science, technology, domestic and international politics, and global economics and resource issues.
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My Analysis: Overall, the idea to invest in Solyndra wasn’t a bad or in error. It could have potentially been a great investment, but unforeseen developments altered it’s outcome (that’s what I can tell at this time, 3 OCT 2011… and I may revise that statement). However, the failings of the DOE (Department of Energy) in scrutinizing its loan program need addressing – if only for the sake of creating better policies for the future. If the US can’t properly subsidize and invest in renewable energy R&D, it might as well just forfeit any race to innovation – which seems like a terrible waste of a great opportunity. I hope the event doesn’t turn away the support of American citizens in wanting to see more investments into new energy.
Internationally, the US (still) needs to get “in the game”. The price of silicon dropped, which affected the raison d’etre of Solyndra (use less silicon in manufacturing). Adapting to (or combating somehow) China’s current domination of the solar industry (from the bottom up, starting with resources), is vital. That said, the US is in a fairly strategically disadvantageous position in terms of creating an environment for domestic success and international exporting of renewable technology. It will take a much more unified and organized effort to compete in developing industries such as cutting-edge solar, and whether or not there is political capability (not just will, but actual functionality) for this remains to be seen.
What was the nature of US Government Investment?
Under the Energy Policy Act of 2005, the Department of Energy administers a loan guarantee program to provide Federal support to “spur commercial investments in clean energy policies that use innovative technologies.” The American Recovery and Reinvestment Act of 2009 (ARRA) expanded this by including language to support loan guarantees for “renewable energy systems, electric transmission systems and leading edge biofuels projects.” It was under this act that Solyndra was awarded $535 million in federal loan guarantees on September 16, 2009 (of which about $520 million was issued) in addition to the $200,880 in federal grant money that the company had been awarded in June 2009. (Melissa Lott, Scientific American)
What technology did Solyndra use in making their product (solar panels)?
Solyndra’s cylindrical design was innovative in the ability to take in sunlight from any angle, via copper indium gallium diselenide (CIGS) and thin-film technology. The real catch to Solyndra’s products was that they were made to use less silicon than standard flat-cell solar panels, an innovation which was potentially ingenious at the time, with silicon being a major price driver in solar technology development.
How did the global market affect Solyndra?
As the global economic downturn led to less money to spend on investments in green technology, the demand for Solyndra’s product shrank. At the same time, Chinese developments in polysilicon production allowed them to flood the market with significantly cheaper Chinese technology. The two-headed combination of less demand for its own product, and the arrival of new and cheaper competition, left Solyndra little ability to reach any of its long term economic goals.
Solyndra, Inc. Timeline
Solyndra founded, based in Fremont, California (USA).
OCTOBER 07 “The solar startup, which has lined up two customers, is discussing its solar technology publicly for the first time.” (GreenTechMedia)
MARCH 20 “Energy Secretary Steven Chu today offered a $535 million loan guarantee for Solyndra, Inc. to support the company’s construction of a commercial-scale manufacturing plant for its proprietary cylindrical solar photovoltaic panels. The company expects to create thousands of new jobs in the U.S. while deploying its solar panels across the U.S. and around the world.”
SEPTEMBER 4 “Vice President Joe Biden, appearing via satellite from Washington D.C., today announced the Department of Energy has finalized a $535 million loan guarantee for Solyndra, Inc.,”
MARCH 19 “Solyndra’s revenue ramp up last year was pretty mind boggling — the thin film solar maker went from generating $6 million in revenues in 2008 to $100 million in revenues in 2009.” (GigaOm)
NOVEMBER 03 “Solyndra, a Silicon Valley solar-panel maker that won half a billion dollars in federal aid to build a state-of-the-art robotic factory, plans to announce on Wednesday that it will shut down an older plant and lay off workers.” (NYT)
SEPTEMBER 21: Solyndra and the China Factor (Forbes Blog). “2009-2010 The financial crash tightens budgets. Germany and Spain cut back purchases of high efficiency solar energy equipment. Virtually everyone with a comittment to buying solar compares any solution to Made in China solar cells and decides to go with the cheap product. any non-Chinese manufacturers of solar cells have difficulty securing polysilicon, a key input, because China has cracked the code on production and procurement.”
SEPTEMBER 23 CEO and CFO plead the fifth. “Brian Harrison, the chief executive, and Wilbur G. Stover, the senior vice president and chief financial officer — each with a lawyer and a single sheet of paper with the text of a statement that he read over and over again, explaining that he was respectfully declining to answer questions — appeared before the oversight and investigations committee of the House Committee on Energy and Commerce. The committee is examining how the company failed after getting $528 million in government loans.” … “The bankruptcy’s timing could hardly be worse for the solar industry; about $9 billion in additional loan guarantee money is available, but by law, projects must break ground by Sept. 30. On Thursday, the sponsor of three major projects that had received tentative approval said that at least one of them would certainly not meet the deadline and that the two others might not either. About 1,000 megawatts of power is at risk, according to the industry’s trade association” (NYT).
SEPTEMBER 27 Solyndra – Illuminating Energy Funding Flaws? “The Solyndra bankruptcy announcement, less than 2 years after it was awarded hundreds of millions of dollars through the federal loan guarantee program, has already led some Congressmen to argue for a reduction in funding for this U.S. Department of Energy program. But, perhaps there is a more fundamental issue at play here – specifically, the optimal role of the federal government in financially supporting the energy industry. According to the editors at Bloomberg News stated on Thursday:
‘The government’s rightful role in this competition is at the beginning — and the end. We favor government support for research labs that can put hundreds, even thousands, of interesting ideas in play. Trying to pick winners in the midst of the action is ill-advised. The government can accomplish more, with less risk, by simply becoming a big, reliable customer for solar, wind and geothermal power.
A well-conceived alternative energy program could save the U.S. many hundreds of billions in the years ahead. If the Solyndra debacle gets U.S. policy pointed in the right direction, the loan-guarantee losses won’t have been totally in vain.’ ”
SEPTEMBER 29 “PR Fail”. One of the more curious aspects of Solyndra’s apparent demise is the blow to reputation of renewable energy development, particularly in the US. As Cleantech Media Solutions asserts, “Solyndra’s obvious lack of a social media crisis management plan has caused immeasurable damage to other solar companies, and to the renewable energy movement in general.” Still, the pride-obliterating mess of an abandoned Facebook page isn’t helped by any of the latest news about Solyndra and its awkward relations with those who provided it loans.
OCTOBER 03 Congressional investigation into the Department of Energy loan program indicate early concern over Solyndra, reports NYT. “The warnings came from both inside the White House — an official in the Office of Management and Budget wrote that the visit could be “embarrassing in the not too distant future” — as well as from private investors, including one Democratic campaign contributor who wrote to the White House the day before the president’s May 2010 visit to Solyndra to urge officials to reconsider the trip.”
OCTOBER 28 “The White House directed a well-known businessman on Friday to conduct an independent review of government loans to energy companies, as House Republicans announced they would consider subpoenaing records related to a 2009 loan to a California manufacturer of solar-energy equipment that is now bankrupt. “