Solar power at a crossroads

Solar power at a crossroads

GOP attacks on solar energy are political maneuvers aimed at keeping us addicted to oil

By John Grula 11/10/2011

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Congressional Republicans are ramping-up their efforts to derail the further development of clean, renewable energy sources by exploiting a flap over the recent bankruptcy of Solyndra, a maker of solar electricity systems in Fremont. Republicans are seeking to discredit government subsidies to the fragile solar power industry because Solyndra was the recipient of a $528-million federally guaranteed loan, and now it is defunct.

But closer examination of this issue reveals a more nuanced understanding of this phony “scandal.” Despite the failure of Solyndra, a victim of the heavily subsidized Chinese solar panel industry, a much bigger federal bet on solar energy is quietly paying off in California. According to the Los Angeles Times, six large solar power plants are currently on track for near-term completion, and they will help the state meet its ambitious clean electricity goals. All of these plants are the beneficiaries of federal loan guarantees, which have also been important to attracting private investment.

The most advanced of these solar power plants is the Ivanpah Solar Electric Generating System being built by Brightsource Energy Inc. in the Mojave Desert near the California-Nevada border. This plant, which will use mirror-concentrated solar energy to generate steam for running turbines, is expected to provide 392 megawatts of electricity to 140,000 homes during hours of peak demand. The project, which received a $1.6-billion federal loan guarantee, as well as private investment from Google Inc. and NRG Energy Inc., is expected to be online in 2013.

Two other commercial-sized solar electricity plants, Antelope near Lancaster and Desert Sunlight near Desert Center in Riverside County, also attracted private equity investments after receiving federal loans of $646 million and $1.5 billion, respectively.  Combined, the two plants will generate 780 megawatts of clean electricity. Alan Bernheimer, a spokesman for First Solar Inc., was recently quoted in the LA Times as saying, “The Department of Energy’s loan guarantee program provided an important source of liquidity to help provide debt financing during a difficult time in the financial markets.”

To those who might object to government “picking and choosing winners in the energy marketplace,” the fact of the matter is this has been going on for a long time.  Government subsidies have played an important role in the development of the energy industry since the 19th century.  Even now, according to the International Energy Agency, global fossil fuel subsidies totaled almost $500 billion in 2010. The US nuclear power industry was essentially created by the federal government in the 1950s and to this day would not survive without taxpayer subsidies. The US coal industry was heavily subsidized during the 19th century, and the gas-and-oil industries have received tax breaks and allowances worth many billions of dollars a year for more than 50 years.  

Just how bad a goof was the government’s bet on Solyndra? In a recent issue of The New Yorker, Financial Page staff writer James Surowieki points out that many private venture capitalists expect that of the new companies they fund, at least one-third of them will fail. Such is the nature of capitalism, in which new businesses fail all the time. Even the savviest of venture capitalists will often back the wrong horse.

By the standards of private venture capitalists, Surowieki argues, the government is actually doing quite well. Under the Obama administration’s stimulus program, the Department of Energy has granted almost $20 billion in loan guarantees to new renewable energy companies, and so far only Solyndra has gone belly-up. The amount of money lost has been a small fraction of the total guaranteed.  

It is also worth noting that Solyndra’s product was a highly innovative successor to the standard solar panel and came in a convenient tube shape that does not require expensive silicon. New technologies are always risky business ventures. Even if the technology works well, economic factors may prevent it from becoming competitive in the marketplace. Government subsidies can make the difference between commercial success or failure for younger technologies, especially when private capital considers them too risky.

The Republican attacks on solar energy are nothing but a political maneuver designed to keep our nation addicted to dirty fossil fuels at a time when we desperately need to move toward clean energy technologies that will also reduce greenhouse gas emissions. Members of the GOP care more about their friends in the fossil fuel business than they do about the health of people and the planet.



John Grula, PhD, is affiliated with the Southern California Federation of Scientists.

 

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Comments

Dr. Grula is exactly correct - Solyndra's failure is in no way an indictment of the overall DOE Loan Guarantee program, let alone the solar power industry as a whole. (You can read my post - Why Solyndra Just Doesn't Matter - here: http://runonsun.com/~runons5/blogs/blog1...)

While some are eager to turn this one company's unfortunate demise into a political football, the reality is that the solar industry is working for America, employing over 100,000 people across every state in the Union. With the right policies in place we will employ ever more people in good paying jobs that cannot be sent overseas.

Solar is the way of the future - but that future is now.

Jim Jenal, Founder & CEO, Run on Sun

posted by jjenal on 11/10/11 @ 04:44 p.m.

IT'S THE BUSINESS MODEL, STUPID!

http://www.mercurynews.com/business/ci_1...
(excerpt)
"Senior executives at Solyndra collected hefty bonuses -- ranging from $37,000 to $60,000 apiece -- as the Fremont company bled cash and careened toward bankruptcy this summer."

http://www.ohiogop.org/index.php/library...
http://google.brand.edgar-online.com/EFX...

You would think that the people who are being paid for administering a financial venture will receive additional financial rewards ONLY AFTER the upstart period, AND THEN, only if their administrative attempt to run the company are sustainably successful!

But to perpetually reward (as seems to be the dominant American business-model) the executive-class BEFORE a clearly impending failure is suicidal. This is kinda' like awarding a journeyman heart-surgeon a hefty "well-done work bonus" right before his impending incompetence murders several patients on the operating table. One of the primary problems here is that -- invariably -- the most populous operating-table victim is America's 99%-inclusive, working class.

As the evidence suggests, it seems that Solyndra's executive aristrocracy KNEW that the company was in financial dire-straits way back at the beginning of 2011 when the DoE decided to step in and restructure Solyndra's debt. Apparently, this proved necessary because its (bonus-receiving) executives just weren't very competent at running the company. And for this? Well, those same administering executives were yet still rewarded for doing such an excellent job of running the company into the ground!

But, as it is in America it seems to me that, WHENEVER any culture's banks are "Too-Big-to-Fail," well, then everybody (especially in the CEO class at least) wants to get on that gravy train. I mean, whenever people get "golden-parachute" treatment for producing a failure, why should they ever seriously desire to produce success?

Or perhaps, failure IS the new success.

DanD

posted by DanD on 11/11/11 @ 05:07 a.m.

The Paradigm Model for rewarding failure ~
http://revolutionarypolitics.tv/video/vi...

DanD

posted by DanD on 11/11/11 @ 07:31 a.m.

The never-ending story of failure-as-success:
http://www.readersupportednews.org/opini...
A lone wolf discovers that the pigs and the dogs engage in common oppression against all of the sheep (apologies to Orwell and PF).

http://www.youtube.com/watch?v=ft7QMuliH...

DanD

posted by DanD on 11/11/11 @ 08:13 a.m.

Solar Power is only to be made by the elite with this inefficent PV panels where only the oil companies and libs own the solar companies. My approach is the old desert technology where anyone can build a water passive panels from Home Depot to heat water, generate electric power, distill waste water, and store/process water per Pasadena Weekly/Pasadena Water-Power article or in other words completely off the grid but the NAACPers decided that no white-man businesses were to be started on the Northside and che commies were to destroy any business starts in the southland while Schiff allows import techies to take American jobs and refuse to naturalize the illegals, paying for services used and TRUELY closing the border. The reason for keep the existing system is to promote slavery (ie working for nothing for the unions and wallstreet). This occupy movement is another Schiff/Dem/Hollywood-armchair-commie/union grab at power with doing-nothing. You want something different go with the AIP party; sell the school property buying out teachers contracts and outsource to Bosco Tech (5 years HS/JC degree); recall the guv and AG and state judges for the prop 8 decade of bypassing the constitutions; ....
OUTSOURCE ALL UNIONS JOBS

EXPEL COMPANIES THAT HIRE WORKERS FROM OVERSEAS INSTEAD OF US CITIZENS

OUTSOURCE POLICE AND FIRE

HALT THE WARS AND SELL OFF MILITARY BASES

posted by br_political on 11/18/11 @ 11:32 a.m.

br_political ...

You need to try writing a little more coherently so I decide whether you are on to something or are just talkin' out your ass.

DanD

posted by DanD on 11/19/11 @ 02:09 a.m.
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