[skipwords]Solyndra was once a rising star in the solar power industry, but a year ago this Friday, it became a black hole. The California company abruptly closed and laid off most of its employees on Aug. 31, 2011, then filed for Chapter 11 bankruptcy days later — casting a shadow that quickly spread across the country to Washington, D.C.
The failure of any high-profile startup can rattle an emerging industry like U.S. solar power, but Solyndra came with extra baggage: namely a $535 million loan from the U.S. Department of Energy. The DOE had even helped it refinance that loan a few months earlier, and since a top Solyndra investor had also raised money for President Obama in 2008, some Republicans accused the White House and DOE of favoring Solyndra even as it failed. Congress soon launched a flurry of investigations.
It's been one year since Solyndra's crash, but much of the dust has yet to settle. Congress continues to sniff for a scandal, while the DOE maintains the loan was "regrettable," but not political. The IRS is also pushing Solyndra for more tax disclosures to help investors recoup their losses, but critics aren't backing off. GOP presidential candidate Mitt Romney, for one, recently visited Solyndra's old offices in Fremont, Calif., where he blamed Obama for "a serious conflict of interest."
Even the outlook for Solyndra itself is cloudy. The company's reorganization plan vows to "fairly and efficiently" repay investors, but that may be hard to do by selling off assets like its Fremont office building, reportedly now worth a third of what Solyndra paid for it. As the Wall Street Journal points out, the post-bankruptcy shell company could also still launch a new for-profit venture, letting investors "cash in on the Solyndra tax breaks by deducting the solar company's losses against their profits."
Romney visits Solyndra's old headquarters in May 2012. (Photo: Justin Sullivan/AFP)
One thing the past year has clarified, though, is that Solyndra wasn't necessarily a bellwether. Critics often note that several other U.S. solar firms also failed in 2011, but upheaval is common in young or evolving markets — as seen after the 1990s dot-com boom. In Solyndra's case, the failure was at least partly due to falling silicon prices: The company was founded in 2005 when silicon was expensive, and touted its silicon-free cylinders as a key alternative to photovoltaics (PVs). But as silicon prices fell in '09 and '10, Solyndra pulled its IPO and closed one of its factories. When the DOE refinanced its loan last year, it may have already been too late.
At the same time, both the global and U.S. solar sectors have continued growing in Solyndra's wake. China's dominance in PV manufacturing is well-known, and cheap Chinese panels likely helped kill demand for Solyndra's cylinders. But as technology has evolved and costs have fallen in recent years, China isn't alone in reaping the benefits. As MNN's Chris Turner reported in January, Germany now has more PV capacity than the entire planet had seven years ago, and Italy added more capacity in 2011 than any other country — all despite Europe's recent economic woes.
The U.S. didn't waste much time mourning Solyndra, either. Of the 2.7 gigawatts in new solar power it installed last year — good for No. 3 globally, behind Italy and Germany — more than 40 percent came in the fourth quarter alone. And according to a report from the Solar Energy Industries Association, the U.S. then installed 506 megawatts in the first quarter of 2012, an 85 percent increase over the first quarter of 2011. "There was considerable demand across each of the three market segments," the report adds, "as residential, commercial and utility-scale solar power installations all increased in Q1 2012 compared to Q1 2011."
The ongoing growth of U.S. solar power is largely due to the same "adverse market conditions" that Solyndra executives cited in their company's demise: cheap PV solar panels. The SEIA reports the average cost of a PV system dropped 17 percent between Q1 2011 and Q1 2012, while the average price of one solar panel has fallen 47 percent. In many parts of the U.S., a new PV system can now pay for itself in less than a decade, depending on factors like sunlight hours, tax breaks and electricity costs. It can still take 19 years in Kentucky or Washington state, for example, but as little as seven years in Louisiana or New Jersey, and just four in Massachusetts.
Illustration of a solar thermal tower at Crescent Dunes in Nevada. (Image: SolarReserve)
Sunlight still represents a sliver of the U.S. energy mix, but it is gaining ground. Several big solar thermal plants are under construction in Western states, including Nevada's 110-megawatt Crescent Dunes Solar Energy Project — which received a DOE loan even larger than Solyndra's — and California's 392-megawatt Ivanpah Solar Electric Generating System. A variety of large PV plants are also being built, but according to market-research firm Solarbuzz, some of the industry's most promising growth is small-scale. About 40 percent of PV projects underway in the U.S., for example, will generate less than 500 kilowatts each.
"These smaller projects have a considerable impact on the communities where they are being built, providing much-needed employment and energy cost reduction," Solarbuzz analyst Christine Beadle said in a July press release. Many small projects also receive state or federal aid — not quite like Solyndra's $535 million loan or oil companies' annual $4 billion in tax breaks, but enough to soften their upfront costs. And while Solyndra's fate may reveal little about the net effect of that aid (especially since most DOE loan recipients are not bankrupt), that hasn't stopped pundits and politicians from suggesting its downfall was "just the tip of the iceberg."
At a congressional hearing last November, U.S. Rep. Fred Upton, R-Mich., implied the U.S. shouldn't support any startups like Solyndra: "In this time of record debt, I question whether the government is qualified to act as a venture capitalist, picking winners and losers in speculative ventures and shelling out billions of taxpayer dollars to keep them afloat." A DOE official disputed Upton's view, countering that DOE "isn't picking winners and losers. It is helping ensure that we have winners here at all."
Aside from Solyndra, the DOE loan program's mission — to "accelerate the domestic commercial deployment of innovative and advanced clean energy technologies" — is generally considered a success. It has supported projects like the country's first two all-electric vehicle factories, one of its first commercial-scale cellulosic ethanol plants and the first national-scale "distributive photovoltaic energy project," which installs rooftop PV panels across 28 states. Its current portfolio is 87 percent "low-risk" power-generation projects, which feed a more reliable demand than novel technologies like Solyndra's do, according to an analysis by Bloomberg Government.
Romney has echoed Upton's doubts in recent months, but the GOP isn't unified against the DOE loan program, which was created by the Bush administration in 2005. Alaska Sen. Lisa Murkowski, for one, defended it in June. "Unfortunately, what we have seen this past year with some of the failures in the loan-guarantee program, it has tainted that whole program to the point where some are suggesting the plug just needs to be pulled," she said at an energy policy forum in Washington. "I don't think that is the case. ... We are focusing right now on the failures instead of also recognizing that we have done good things [with] the loan-guarantee program."
Those good things have been obscured for much of the past year, but as solar power continues growing in the U.S. and abroad, Solyndra's shadow may finally be fading.
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