Solyndra was a U.S. solar power startup with a cool idea: cylindrical solar panels. These "capture sunlight across a 360-degree photovoltaic surface," according to the company's website, letting them convert "direct, diffuse and reflected sunlight into electricity." They're also weather-resistant, since rain falls between the tubes instead of pooling. Snow even helps them by boosting the reflected light, or albedo, from below.

But despite all its engineering smarts, Solyndra failed an even more important test: economics. The company filed for bankruptcy this month, an unfortunate but not unusual event in its field — two other U.S. solar firms, SpectraWatt and Evergreen Solar, have also filed for bankruptcy since July. Competition from low-cost producers in China is widely blamed for hindering efforts to jump-start the U.S. solar panel industry.

What makes Solyndra stand out, however, is a $535 million loan it received from the U.S. Department of Energy in September 2009. Thanks to Solyndra's recent bankruptcy, that's more than half a billion dollars of taxpayer money down the drain.

Such a loss would be frustrating under any circumstances, but in this case it has attracted extra attention. FBI agents and the Energy Department's inspector general raided Solyndra's offices last week, and a House committee is investigating whether the company misled the U.S. about its finances, or whether the U.S. improperly rushed the loan's approval. Officials from the Energy Department testified before the House panel on Wednesday (see video below), while Solyndra executives may soon do the same. And ABC News reports that the Treasury Department's inspector general is also now investigating the Federal Financing Bank's role in the loan guarantee.

How did it come to this? How did a promising clean-tech company go from rising star to black hole so quickly? And what does it mean for the future of U.S. solar power?

The rise and fall of Solyndra

Solyndra was born in May 2005, as a global silicon shortage drove up the cost of conventional solar panels. (Since Solyndra's cylinders aren't silicon-based, they were touted as a key alternative.) Two months later, President George W. Bush signed the Energy Policy Act of 2005, an expansive law that, among other things, created the Energy Department's 1703 loan guarantee program. Solyndra then spent much of the next year raising venture capital, amassing $78 million by the time it applied for a loan guarantee under the 1703 program in December 2006, according to a timeline published by Climate Progress. It was one of 16 companies greenlighted by the Energy Department in 2007, and by late 2008 it had raised $450 million in private funds.

At that point, the outgoing Bush administration faced criticism for its slow pace in awarding loan guarantees under the 1703 program. Climate Progress reports that administration officials took Solyndra before an Energy Department credit-review committee in January 2009, apparently eager to show progress before Obama was inaugurated. But the committee remanded the loan back to the Energy Department, arguing it wasn't ready for the conditional commitment the officials wanted.

Two months into Obama's tenure, however, the same committee approved Solyndra's application for a conditional commitment. That alone might not raise eyebrows, but House lawmakers have also obtained emails suggesting the Office of Management and Budget may have been pressured to rush the approval — possibly so Vice President Joe Biden and Energy Secretary Steven Chu could announce the loan at a groundbreaking ceremony later that year. In one email exchange, a DOE official asked if "there is anything we can speed along on the OMB side." The OMB official wrote back: "I would prefer that this announcement be postponed. This is the first loan guarantee and we should have full review with all hands on deck to make sure we get it right."

White House spokesman Jay Carney argues these emails show nothing more than "a scheduling decision," and it's still unclear if they'll amount to a real scandal. But even as Solyndra kept soaring, its business plan was crumbling — raising doubt about the Obama administration's scrutiny, if not its scruples, in awarding the loan. Silicon prices had begun falling by mid-2009, while China continued a historic production push that would halve solar-panel prices from June 2009 to August 2011. Yet after six months of due diligence — and another $219 million in private capital — the DOE finalized its $535 million loan guarantee for Solyndra, the first beneficiary of the 1703 program.

Biden and Chu announced the loan in September 2009 as planned, and President Obama visited Solyndra's Fremont, Calif., headquarters in May 2010. By then, however, the new-car smell was already gone — Solyndra had effectively gambled that the price of silicon-based solar panels would stay high, but it continued to fall, fueled by cheaper silicon and a surplus of Chinese-made panels. Solyndra pulled its IPO in June 2010, citing "adverse market conditions," and soon closed one of its factories. As the company's woes mounted, the DOE and private investors helped it restructure its loan in February 2011 to give it a chance of avoiding bankruptcy. That didn't work, though, and Solyndra filed for Chapter 11 bankruptcy protection on Sept. 6.

Solar power after Solyndra

While various inquiries sort out the political effects of Solyndra's collapse, what does it mean for solar power in general? Does its failure foreshadow the fate of its industry?

Apparently not. As the market research group Solarbuzz reported this week, the same decline in silicon prices that doomed Solyndra is helping producers of traditional photovoltaic (PV) panels: In the past two months alone, U.S. development of PV panels has grown from 17 to 24 gigawatts, a 41 percent increase. "Utility expectations for improved installed pricing measured either in per watt peak or kilowatt hour have vastly increased over the past quarter," Solarbuzz President Craig Stevens said in a statement Sept. 12. "The result is more RFPs and an acceleration of PV orders."

And as MNN's Matt Hickman recently reported, Google has invested $280 million in a company called SolarCity, which is launching a $1 billion project to double the number of residential PV systems across the country. Dubbed "SolarStrong," the effort aims to install solar arrays on 160,000 homes and other buildings at U.S. military bases.

Still, the failure of Solyndra has led some Republican lawmakers to criticize federal support of the solar industry. "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," Rep. Fred Upton, R-Mich., said during Wednesday's hearing. Yet Solyndra is the only company under the 1703 program to have gone bankrupt, and the head of the DOE's Loan Programs Office disputes Upton's analysis. "This isn't picking winners and losers," Nate Silver said at the hearing. "It is helping ensure that we have winners here at all."

Many critics point out that solar power is federally subsidized, but so are virtually all energy sources: Fossil-fuel capital investments like oil field leases, drilling platforms and mining structures are taxed at 9 percent, for example, the lowest rate of any industry listed in a report by the Congressional Budget Office. Total tax breaks for oil companies are estimated to be around $4 billion per year, and the U.S. has also sunk millions into "clean coal" and nuclear power subsidies. Plus, as ThinkProgress reports, Upton has received $1.2 million in donations from the fossil fuel and nuclear sectors during his career, and 15 House Republicans who now question U.S. solar subsidies have received a total of more than $11 million. Yet they show little concern about federal support for those industries, even as they accept money back from them.

Perhaps the most compelling case for U.S. support of solar power is its vast potential, and the risk of falling behind China. While all fossil fuels are finite, the sun won't die for eons — and it delivers an estimated 84 terawatts of energy to the Earth's surface every day, five times more than humanity uses in a year. Today's solar panels can't use that energy efficiently enough, but the technology is quickly evolving. And as the Brookings Institution wrote in a recent report, "the clean economy is manufacturing- and export-intensive," meaning countries that make and sell solar panels are poised to dominate. In a blog post this week, Brookings researchers Mark Muro and Jonathan Rothwell compared today's clean-tech industry to the 1990s IT industry, citing similar rewards for producers. "It follows that the U.S. risks losing out on tremendous gains if it decides not to invest heavily in clean-tech and relies on imports," they wrote. As U.S. Rep. Henry Waxman, D-Calif., said this week: "If you live in reality, you know the world cannot continue its dependence on fossil fuels, and that we are in danger of losing the [solar] industry to our competitors, especially China."

Yet the Washington Post also reports that the Energy Department's loan guarantee program has so far fallen short of its goal to create or save 65,000 jobs, and that seems to be the main issue: While solar power is key to the country's long-term economy, it may not be the best way to fight broad unemployment in the short term. "There are good reasons to create green jobs," Princeton University economist Alan Blinder tells the Post, "but they have more to do with green than with jobs."

And to that end, Silver told lawmakers Wednesday that solar power is still "vital" to U.S. interests. "While we are all disappointed in the outcome, securing America's leadership in this vital new industry requires that we support innovation and deployment," Silver said. "I can't imagine a scenario in which we would willingly as a country walk away from what would be undoubtedly one of the largest, if not the largest, industries in the world over the next several decades." As Muro and Rothwell point out, though, the U.S. might be wise to downplay the near-term ability of solar to spur jobs. "We certainly don't think that the adoption of these policies would create millions of jobs in within the year or two of passage," they write, "but it would help the economy now, and set us on a course for much greater prosperity in the future."

Russell McLendon ( @russmclendon ) writes about humans and other wildlife.

What Solyndra means for solar power
The solar company's collapse has electrified many critics of President Obama. But what does it say about the sustainability of U.S. solar power overall?