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Policy & Politics Solyndra-solar-why-Obama-DOE-invested

Published on October 22nd, 2011 | by Susan Kraemer

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The Real Reason the Obama Administration Backed Solyndra



Solyndra-solar-why-Obama-DOE-invested

The Obama administration had set a goal, for the public good, of cutting solar costs to $1 a watt installed by 2016.

The reason that the Obama Department of Energy invested $535 million in backing some of the private VC loans (which totaled $1 billion)  to Solyndra was that the company had a way to bring down the cost of solar.

The unique solar panel they made was key to this effort. Note that the Solyndra roof (pictured) is quite different from the typical solar roof. That difference is key. Solyndra wasn’t just another solar panel manufacturer, making just another thing that could be more cheaply made in China.

The corporate media presents the Solyndra bankruptcy as if there was no real differentiation between Solyndra and the typical solar panel manufacturer, making it easy for Republicans to use them to trumpet unfounded accusations of cronyism, but you should understand that the Solyndra panel represented a breakthrough technology.

In their white paper A Grand Challenge for Electricity From Solar, on how to get solar down to $1 a watt by 2016, the DOE sets out their goals, and noted that installation costs represented about half the cost of solar.

“Two approaches will be pursued to achieve the dramatic cost reductions required:

(a) installing arrays in fields on lightweight frames with equipment that has the sophistication of agricultural combines capable of covering hundreds of acres a day, and

(b) finding ways of building PV arrays into building components such as roofing so that the incremental installation cost could be very low. Arrays that follow the sun are somewhat more expensive than installations that don’t move but can produce more electricity per year per watt of installed PV and can produce more energy late in the day when many utilities need most power.

Tracking is usually also needed for units that concentrate sunlight on high efficiency cells. Concentrating systems add to costs but can reduce the area and cost of the photovoltaic devices.”

Solyndra invented a completely unique solar panel, using (then cheaper than traditional) thin film wrapped entirely around inside light weight cylindrical tubes that could make energy from light coming from any direction.

Arranged in cot-like pop-together arrays, they were so light they could practically be popped together by four year olds. Their unique technology would really speed up installation time, cutting installation costs – which are about 40% of the cost of solar.

Solyndra made arrays that followed the sun. Normally arrays that follow the sun must be moved on trackers, adding to their expense. Solynndra made solar that followed the sun passively because they were cylindrical and could make energy from light coming from any direction. Because the thinfilm in the cylinders could pick up light from any direction. Solyndra panels did not need heavy expensive trackers to follow the sun.

If solar were cheap, we could be energy independent and avoid climate change. Public investment in promising manufacturing in the US could make solar cheap, and of course create jobs doing so. This should be obvious, but it is not being written. Instead, some ridiculous political motive is assigned to the Obama administration for getting involved.

Susan Kraemer
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About the Author

writes at CleanTechnica, CSP-Today, PV-Insider , SmartGridUpdate, and GreenProphet. She has also been published at Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times.    Follow Susan on Twitter @dotcommodity.



  • Brian

    Who in their right mind would build a factory in likely one of the most expensive commercial zones in the nation, in an area where due to the high cost of: homes/rent, land, labor, everything else (duh!) (“Bay Area”) ? A real well-intentioned capital venture from the start! Just like Tesla, Fisker. Let’s build a car for the masses or at least the masses that have between, oh let’s say, 60 and 120K to buy a car. THAT’L really help our environment! Dumb asses. Yeah, All politicians are crooked. This time, it is Obama who is the crooked one. Get over it and get him the hell out of DC. Thanks for your time.

    • Bob_Wallace

      Sorry, Brian, but you don’t grasp the reality of creating a new car company.
      You can’t start by manufacturing zillions of cheap units. You have to start with something for which deep pockets people will pay a premium. This allows you to spread your start-up/development costs over fewer units while you build your brand.

      And by coming to market with a car that impressed the hell out of everyone, Tesla turned the perception of EVs on its head. Within a week of releasing the Roadster the myth of EVs being golf carts with windows vanished. The Roadster blew the doors off the competition at a bargain price.

      Having made their mark Tesla was able to move into the the next level on the route to building zillions of econoboxes, the luxury sedan. They’ve produced an impressive car.

      Their next big release will be a model that competes with the “nice” economy cars, the Camry-type sedan. An EV that lots of people can afford.

      President Obama crooked? That’s just a butt-assed stupid claim.

      Wise up fellow….

  • Brett Strouss

    Two years ago when I was the president of a solar design and installation company, the Solyndra panels were the least expensive high-performance photovoltaic product available for flat-roof commercial buildings. We just couldn’t get them quickly enough, because demand was too high and there wasn’t enough manufacturing capability, and even worse, conditions were hampered because the banks were restricting financing to perfectly qualified business owners so deals fell through after long waits for the banks to think about it. The technology was brilliant, and had been developed over a period of years to maximize the output from white-roofed commercial buildings (Note: you should also read up on how switching to white roof material would significantly reduce energy costs in much of the US). But global demand didn’t meet projections for the entire PV industry, and overproduction of silicon wafers and huge investments in China’s manufacturing capabilities (investments were from Chinese, US, and European parties) cheap imported traditional panel installations soon became more cost effective than even Solyndra installations could deliver. Remember that installations consist of engineering design, panels, inverters, racking systems, wiring, permits, regulatory registration costs, etc. and a huge labor cost. If the government would try to figure out just how many times they are pushing in one direction while also pushing in the opposite direction, and realize that the Solyndra situation was partly due to their (our?) own mis-management of so many things (administrations and parties are both at fault). For instance, we offer huge tax incentives for homeowners and businesses to convert to solar, while funding US solar businesses to add jobs, but allow the people and companies buying the systems with our future tax dollars to purchase imported systems (so perhaps 30% or more of that investment leaves the country), and allow US companies to move manufacturing facilities funded with our tax dollars to foreign countries. It’s not that simple, I realize, but in the solar industry we’re exporting manufacturing equipment that is putting the rest of the US solar manufacturing industry out of business, and claiming that as an industry we have a net positive cash-flow due to the export of our manufacturing equipment and technology. There are plenty of other incentives for renewable energy, but we choose to use tax credits. Fewer tax dollars today works against us in the long term. I think the spotlight should be on how we created the mess that caused or at least allowed Solyndra to fail, and how our government continues to fuel the fire that makes us both less competitive and deeper in debt.

    • Anonymous

      Thanks for that post, Brett.

      Could you give some cost comparisons for Solyndra vs. flat plate during the period about which you report?

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  • euroflycars

    “…you would realize that you’ve been fed a massive does of BS.”

    Nobody is feeding me with whatsoever small doses of BS: I’m picking up information very selectively, searching for the missing pieces to complete my puzzle — whereby the masterpiece in our case is the photographic picture of Solyndra PV panels, together with key pieces like the million versus billion understatement which I see as Mrs Kraemer’s trick to divert the readers’ attention from the true dimension of the government’s bad faith…

    Another of her cover-up tricks is by omission as she writes: “Solyndra was only 1.4% of all the renewable energy we invested in.”

    I wonder if she’d be willing to tell us what the percentage of total PV investment versus total investment in renewable energy is — and I wouldn’t be surprised to see this ratio giving us one more clue about the government’s true intentions.

    “There were major supporting articles in publications such as the Wall Street Journal. The right-leaning Walton (Walmart) family were major investors.”

    Isn’t the Wall Street Journal an integral part of the real versus the official government? And don’t you think that therefore the WSJ, through its biaised major supporting article, “sold” the flawed deal to the Walton family in order to flout their speculation on selling very cheap PV panels in their department stores?

    Because, let me stress it again: mass-produced and therefore cheap PV panels are threatening the government-coveted energy lobbies who just love the idea of going on for ever keeping us hostages at the outlets of their distribution networks!

    • Anonymous

      The Wall Street Journal is owned by Rupert Murdoch. Same as Fox News. The supporting article for Solyndra appeared after the Waltons had invested in Solyndra.

      The government’s true intentions? The administration’s intentions? To get the economy healthy once more by encouraging US manufacturing and creating jobs. To cut the amount of CO2 we pump into our atmosphere in order to reduce the probability we roast our planet.

      The Democrats in Congress are on board with getting the country healthy once more. The Republicans are intentionally blocking anything which might make the country better in an attempt to make President Obama a one term president and put a friend of the wealthy in the White House.

      Why put money in solar? Because solar technology is on its way to provide us cheap, clean electricity.

      Get rid of our energy distribution system? Nope. Does not make sense. Very few people are going to be willing or able to operate their own utility system. And we need to put wind turbines where the wind blows, solar panels in sunny places, steam turbines where we find hot rocks and underground streams to feed those turbines. Then we need to distribute that power to where we want to use it.

  • Solarpete

    Installation is not 40% to 50% of the cost of solar! Installation including mounting equipment and labor makes up at the very most 1/6th to 1/10th of the total! Light weight frames? Trackers? Reduce costs? Don’t drink the kool aid!

    • Susan Kraemer

      I’ve worked in solar estimates in California and installation is indeed 40%-50% of the cost of rooftop (what Solyndra made) solar, just as the US Department of Energy says in the study I cite in the article.

    • http://www.facebook.com/people/David-J-Conklin/100001245452271 David J. Conklin

      Where’s the proof, Pete?

  • Max

    “If solar were cheap, we could be energy independent and avoid climate change.”

    Your article is well written. Thank you for laying out the ideas coherently. I thought you went a little far with this sentence, though.

    • Susan Kraemer

      Yeah, if wind were cheap, etc, would be more accurate. You’re right.

  • Larry

    They went broke because they had too much easy money to throw around on too elablorate of a factory and were too slow coming to market.

    If they had built a lean and mean manufacturing facility back when Bush was President, and if their management was up to the job, a highly questionable assumption, they might have made it.

    Instead they spent way too much money and time to build a palace to manufacture a product that was rapidly becoming out dated.

    A Classic Liberal series of errors.

    • Anonymous

      Larry, with the facts laid out so clearly for you to read why would you go ahead and post this stuff?

      Are you not aware that Solyndra’s CEO was a Republican? And that the conservative Walton/Walmart family were major investors?

      And you somehow twist this Republican led , Republican financed, Republican approved operation into “A Classic Liberal series of errors”.

      You win the Fancy Tap Dance trophy for today.

      Either that or a lifetime membership into the Pinocchio Club….

  • Anonymous

    to the confused commenters below, some key points:

    the solar industry is a net exporter, by $2 billion. (not many U.S. industries can say that) and it is a net exporter to China!

    the U.S. solar industry has grown tremendously in the last year (and recent years, in general) and now employs over 100,000 people (more than the coal industry)

    http://cleantechnica.com/2011/10/20/texas-solar-energy-hitting-state-in-1-month-all-energy-texas-oil-gas-industry-has-ever-produced/

    the federal government has been a VERY good investor. i think any VC would be happy if only 1,4% of its investments didn’t work out!

    http://cleantechnica.com/2011/10/21/obama-doe-picked-more-energy-winners-than-silicon-valley-vcs/

    http://cleantechnica.com/2011/09/27/1-4/

    for more debunkings of the solyndra pseudo-scandal, check out: http://cleantechnica.com/tag/solyndra/

  • Anonymous

    This type of liberal agenda driven article does not belong on a link from news. It belongs on left wing blogs.

    • Anonymous

      Answering my own question, yes, it does seem like the tin trumpet has been sounded.

      Wonder which right wing blog put out the call?

      • Anonymous

        It was featured on Google News.

  • Suzmar53

    The Government did not have 1 Billion to spend on this project. Let private industry work this out. So tired of our tax dollars being spent just so a few politicians can put another feather in their caps!

    • Jfitz

      Public private partnerships can be very important (look at the chinese). Howver intersting the technology is, government has a responsibility to fully vet the company. It is shameful to throw money at a promising idea whe the fundamental business plan is flawed or run by friends of the administration.

      • Anonymous

        This company was fully vetted. They failed because later, after they had been given the loan guarantee and begun production, the world changed. Some other panel manufacturers (including Chinese companies with enormous government support) were able to greatly reduce the price of solar panels.

        (Did this site get put on a right-wing hit list?)

      • Susan Kraemer

        Lots and lots and lots of CEOs of renewable energy companies and VC funders warmly regard this administration. It is because this administration shares their goals. CEOs of renewable companies want to prevent climate change, and switch the country to clean power, and so does this administration.

        There was nothing special about Solyndra, except it invented bold and very promising technology that could do it. Then solar prices dropped 70%, and they were ruined.

      • Anonymous

        Er….

        The CEO, the guy who ran Solyndra, its Chief Executive Officer was a Republican.

        By what stretch of your imagination does that make him a friend of the administration?

    • Susan Kraemer

      Well China invested $800 billion. We invested $90 billion on clean energy, and Solyndra’s 1/2 billion loan guarantee was a low risk guarantee.

      But even low risks sometimes blow up.

    • Go figure

      Why would private industry invest in the United States of America? When was the last time a private industry opened up a manufacturing plant in your state? The Government did not and has not stopped private industry from opening a plant in your state. They don’t want to because they may have to pay a reasonable wage!

  • Pingback: Why Obama Backed Solyndra | Planetsave

  • Monetclause

    Cylindrical shape means that less of the cells are facing the sun, so the non-tracking principle is also a reduction in power produced. Regardless of this fact (BTW it is half of a Billion not million as the article erroneously mentions) previous administration had seen the danger of Solendra’s business plan, hence, the decision was, as usual, due to the immaturity of the current administration and it’s reliance on academia, notwithstanding the basic cronyism.

    • Dcard88

      The previous admin were complete id!ots and had no clue about anything to do with energy consevation. Zero incentive to take a chance on anything that would eliminate the use of fossil fules. Your statement that the cylindrical shape would reduce the energy recovered is also rediculous. Like saying volcanoes are causing global warming, as if there is a single study EVER done that did not at least attempt to account for volcanoes and solar energy changes
      Which person in the current admin is immature? Or maybe you were thinking of the rediculously immature performance in Vegas of the repub candidates who think they can do better than Obama.

      • euroflycars

        Monetclause’s argument about the cylindrical tubes reducing the aera of cells directly exposed to the sun is absolutely correct. There’s no bargain and the structure is obviously more complex, i.e. more expensive than flat panels.

        The true reason why the US government poured big money into this flawed technology is indeed because it’s… flawed!

        Big Oil and all the other energy lobbies who are standing behind the official government while keeping us hostages at the outlets of their distribution networks are against PV because PV is paving an avenue to individual independence from these outlets.

        • Anonymous

          If you would take a few moments and read this site’s article about the Solyndra myths you would realize that you’ve been fed a massive does of BS.

          Solyndra’s technology was viewed by the solar industry and financial industry as very promising. There were major supporting articles in publications such as the Wall Street Journal. The right-leaning Walton (Walmart) family were major investors.

          At the time Solyndra started solar panels were quite expensive and their product delivered electricity at a competitive price. Had panel prices fallen a bit slower Solyndra might have been able to keep up.

          Read up…

          http://cleantechnica.com/2011/09/20/solyndra-facts-lies/

          And let’s get honest, shall we? All of this incredible activity over Solyndra’s failure is 99% about trying to harm President Obama as part of the Republican attempt to make him a one term president.

          Why is unemployment so high? Because Republicans are blocking anything that might put people to work in order to harm President Obama.

          Republicans just blocked a job plan that would have put hundreds of thousands of Americans to work and have cost the very rich nothing more than pocket change. How stupid is that?

          Why are we not opening more manufacturing in the US and improving our balance of trade and lowering our national debt? Because Republicans are blocking anything that might improve our economy in order to harm President Obama.

          Would you ever imagined that a major political party in the US would intentionally harm the country in order seize more power and transfer even more wealth from working and middle class people to the very rich? What kind of people have Republican voters sent to Washington? Why did they chose a bunch of “burn the village to save the village” representatives and senators?

          Do the vast majority of Republican voters not realize that they are harming themselves? Can they not find fiscal conservatives who aren’t working against their interests?

          Aren’t the large majority of Republicans people who make under a million dollar a year? Don’t they need a thriving economy to keep their jobs and incomes secure? Don’t they realize that once the 1% owns 99% the rest of us live in slums?

          • euroflycars

            Sorry, I just posted as a comment what should have been a reply to Bob Wallace — yet let me take the opportunity to add a preamble:

            Bob Wallace seems to surf on the presumably quite strong impact of my first comment on this forum, to focus attention on the content of his very long reply…

            Now, here’s my (slightly amended) reply to his reply:

            “…you would realize that you’ve been fed a massive does of BS.”

            I’m picking up information very selectively, searching for the missing pieces to complete my already well advanced puzzle deemed to illustrate recent history — whereby the masterpiece in our case is the photographic picture of Solyndra PV panels, together with key pieces like the million versus billion understatement which I see as Mrs Kraemer’s trick to divert the readers’ attention from the true dimension of the government’s bad faith…

            Another of her cover-up tricks is by omission as she writes: “Solyndra was only 1.4% of all the renewable energy we invested in.”

            I wonder if she’d be willing to tell us what the percentage of total PV investment versus total investment in renewable energy is — and I wouldn’t be surprised to see this ratio giving us one more clue about the government’s true intentions.

            “There were major supporting articles in publications such as the Wall Street Journal. The right-leaning Walton (Walmart) family were major investors.”

            Isn’t the Wall Street Journal an integral part of the real versus the official government? And don’t you think that therefore the WSJ, through its biaised major supporting article, “sold” the flawed deal to the Walton family in order to flout their speculation on selling very cheap PV panels in their department stores?

            Because, let me stress it again: mass-produced and therefore cheap PV panels are threatening the government-coveted energy lobbies who just love the idea of going on forever keeping us hostages at the outlets of their distribution networks!

          • http://www.facebook.com/people/David-J-Conklin/100001245452271 David J. Conklin

            >I wonder if she’d be willing to tell us what the percentage of total PV investment versus total investment in renewable energy is

            Irrelevant.

        • Anonymous

          while you may have some valid points here, i don’t think Obama would have gone around doing press conferences at Solyndra and drawing attention to the fact that the DOE supported it if he thought the company was going to fail.
          that would be political masochism.

    • Anonymous

      Your claim is 100% bogus.

      The Bush Administration fully supported Solyndra, in fact pushed the DOE grant committee to approve the application in and attempt to get the loan guarantee approved before Bush’s term ended.

      The committee found the application incomplete and returned it to Solyndra for more work. That meant that the loan guarantee was not granted until a few weeks into President Obama’s term.

      Solyndra’s idea worked as long as panel prices were high. And they might have been successful had panel prices not fallen as rapidly as they did. Solyndra was not able to reduce their thin film costs as rapidly as other companies did.

      Solyndra was not the only solar company to be forced out of business when some companies were able to drop their prices much faster than anyone expected. There has been a major shakeout in the solar industry as the weakest producers have failed, Solyndra was only one of a few.

    • Susan Kraemer

      No, cylindrical, combined with white roofs (reflect sun) actually made it a lot more efficient, and also because the cylinder shape meant the solar panels could pick up energy for more hours in each day from the first rays at sunup to the last rays at sundown, so it was a breakthrough in terms of hours of production daily.

      Companies with great ideas do fail. I can’t tell you how many incredible tech breakthroughs I cover developed by brilliant engineering techie types who have great ideas, but less savvy in actually running a business. (Conversely, many companies with trite ideas do succeed – think Microsoft.) It is almost typical.

  • Whodat12

    He backed the company because one of the largest owners was one of his largest political financial contributors to his campaign. This was payback, like the unions, GM, teachers, ect. Americans know this, no need to be an apologist for Obama.

    • Dcard88

      Please name a president who didn’t ‘pay back’ his friends and supporters with huge tax dollars. The difference is, funding renewables is money more than well spent

      • Ajfarrah

        Imagine $1billion going to a thousand small outfits for r&d on solar.
        Putting all your eggs in one basket will give the solyndra result.

        • Ajfarrah

          Small business is the major driver of jobs and research the major driver
          of creative small business

        • Susan Kraemer

          No, the govt did NOT put all its eggs in one basket. Solyndra was only 1.4% of all the renewable energy we invested in.

          (The private investors (VCs) invested a billion. The govt loan guarantee was for half a billion.)

    • Anonymous

      Why did Bush back Solyndra, in fact, push the DOE to approve the loan?

      Might it have been for the same reason that Obama backed Solyndra – that it created some new manufacturing in the US and created some good job for Americans.

    • Susan Kraemer

      Solyndra was 1.4% of the renewable investment by this administration. So are the other 98.6% of them all his good buddies too?

      Link to 1.4% facts:
      http://cleantechnica.com/2011/10/21/obama-doe-picked-more-energy-winners-than-silicon-valley-vcs/

    • Anonymous

      Actually one of the largest owners was not one of President Obama’s largest political financial contributors to his campaign.

      George Kaiser, to whom you refer, did not have any private money invested in this operation. He stood to make zero money from Solyndra.

      A nonprofit run by Kaiser’s family did have money invested but none of the potential earnings would have flowed to Kaiser or his relatives.

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