2011-10-04

What's Really Happening At Solyndra

You’ve heard bad things about it in the news, but one company’s bankruptcy doesn’t spell doom for the solar industry, or government funding of energy projects.

If you’ve read any news recently, you’ve heard of Solyndra, the big solar firm whose bankruptcy is causing headaches for the Obama administration and is being used as evidence that the world isn’t ready for solar power. But the administration is plunging ahead with renewable energy grants, and when you look at the evidence, it seems that they may be in the right; Solyndra may not prove much of anything besides that the market punishes bad businesses.

A new infographic from solar from One Block Off The Grid takes a look at what exactly happened to Solyndra, and what it means for the rest of the industry, outside of allowing a lot of people to bloviate. As we’ve written before, Solyndra’s solar panels were simply beaten by the market. Though Solyndra was once beating the average price badly, today, other companies are making their products cheaper:

If anything, this means that solar is more accessible. Solyndra’s failure is because solar panels are cheaper and more people have access to them. And what does it say about the government’s grant program? Well, Solyndra did get a large chunk of money from the government (and us taxpayers), and that money is now gone. But it’s a tiny amount of the total money that the government is investing in renewables:

And do Solyndra’s failings presage a general failure by the government to invest smartly in renewable energy projects? Is the program’s entire $38.6 billion doomed to be lost like the $535 million given to Solyndra? Barring other unforseen disruptions in the market, the other nine of the top 10 most funded companies are all doing fine:

Issues of any shady emails between the administration and the company aside, Solyndra is an edge case when it comes to the prospects for solar power. The free market rejected Solyndra’s approach--other people can build solar panels cheaper. While the DOE’s grant program officers should, perhaps, have seen that development coming, the Solyndra case doesn’t seem to be part of any trends about the lack of impact of solar power and government funding of renewables.

The full graphic, which also includes a helpful timeline of Solyndra’s demise, is below, or you can look at it large on 1BOG’s site.

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2 Comments

  • Eric Bischoff

    Maybe it's time for everyone to help make sure the solar industry gets all the help it needs by passing the right laws and providing the right kind of help. I know from my own experience while I installed 71 solar panels on my house that the banks were of no help. The appraisers for refinancing would not add any value for that pretty expensive 16KW system and the tax and rebates were so convoluted no one really understood the possibilities, and payback schedule.

    Just simplify the whole process. It works. It's clean, it's the right thing to do, it pays for itself, there are millions of available rooftops, it's a win win situation, it creates well needed jobs, Just make it easy for the consumers to want to do it without having to lay outout of pocket cash.

  • Jonathan Freije

    This article has great graphics and some good thoughts, but the article is flawed. I agree that solar energy is not going away and will only increase over time. I also agree that it is crucial for the future. This article though declares, "It's all relative." 

    A five hundred million dollar loss is actually a small percentage of the overall portfolio. True. But that does not mean that voters and pundits won't bloviate. The author is confusing private financial markets with government. A private firm is accountable to its board and stakeholders, and all invest their money freely without coercion. Government though has a higher level of responsibility placed upon it. Instead of voluntary investments, it collected taxes and created an energy portfolio without significant input from voters. It now has to explain that loss to voters who may or may not have wanted to make that investment. A five hundred billion dollar loss is simply not going to be accepted by most voters, even if it is only a small part of the whole. Maybe the government is right, maybe not. The point is that investment wisdom won't explain the political situation.

    I would suggest that "A Trade War in the Solar Industry Doesn't Make Sense" by Jigar Shah has more insight into solar energy in America than this article.