The Solyndra Hearing: Squabbling, Accusations And Four Big Questions
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 On the heels of the FBI's arrival last week at the company's California headquarters for an unspecified search, the U.S. House of Representatives has begun an investigation into whether Solyndra - and the Obama administration - engaged in wrongdoing when the company was offered its loan guarantee in 2009. At a Wednesday hearing on Capitol Hill, representatives from both sides of the aisle interrogated Jonathan Silver, executive director of the DOE's Loan Programs Office, and Jeffrey Zients, deputy director of the Office of Management and Budget (OMB). (Solyndra executives are expected to testify next week.) The four-hour-plus probe - titled "Solyndra and the DOE Loan Guarantee Program" - revealed no groundbreaking revelations and frequently devolved into partisan sniping. However, it zeroed in on a few crucial questions that will likely dominate ongoing discussion of the Solyndra scandal. Most importantly for the solar sector, the answers to these questions could determine the course of the federal government's future support - or lack of support - for solar and other forms of renewable energy. 1. Why did Solyndra fail? During his opening testimony and the question-and-answer session, Silver maintained that Solyndra's proprietary cylindrical-module technology simply fell victim to poor timing. As solar professionals are well aware, the market in 2006 and 2007 was vastly different from today's market. When loan-guarantee application due diligence was starting, Silver said, the combination of high polysilicon prices and expensive balance-of-system components made Solyndra's technology compelling - despite its higher production costs. But plummeting polysilicon prices, an influx of low-priced crystalline modules from China and rocky conditions in several critical European solar markets over the past couple of years hit across the PV industry. "These changes were particularly damaging to Solyndra," Silver added. Of course, as several members of Congress mentioned during the hearing, due diligence should include the evaluation of future risks and thorough industry analysis. Accepting Solyndra's failure as a consequence of market forces raises the question of whether DOE staffers were fully aware of Solyndra's vulnerabilities at the time of the loan guarantee's approval - and, if so, whether they and their counterparts in other governmental departments responded appropriately to this knowledge. 2. Did Solyndra get preferential treatment from the Obama administration? Much of the hearing focused on a critical three-week period in January 2009, during which President Bush left office and President Obama took over. At this point, the DOE's judgment of Solyndra's loan-guarantee application changed from critical to favorable - an abrupt change of heart that has raised red flags. "One of our witnesses today, Mr. Silver, attempts to claim in his written testimony that the Bush administration is equally at fault for approving Solyndra and that Solyndra was a train ready to leave the station when President Obama took office," said Oversight and Investigations Chairman Cliff Stearns, R-Fla., in his opening statement. "In reality, on January 9, 2009 - at the end of the Bush administration - the DOE Credit Committee voted against offering a conditional commitment to Solyndra, saying that the deal was premature and questioning its underlying financial support," he continued. "Only after the Obama administration took control, and the stimulus passed, was the Solyndra deal pushed through." While acknowledging that the timeline was correct, Silver pointed out that the DOE committee (which comprises career public servants, not political appointees) did not "reject" the loan under Bush, but rather, "remanded" it, requesting additional information. What type of information was provided that suddenly convinced the DOE that Solyndra's application had become sound? Silver mentioned "due diligence" and "market research" but did not reveal any specifics. Like many of his fellow Republicans at the hearing, Rep. Joe Barton, R-Texas, remained unconvinced. "'Due diligence' doesn't cut it," he told Silver. "We know that one thing changed: The president changed." The George Kaiser Family Foundation owns approximately a 35.7% stake in Solyndra, according to Securities and Exchange Commission filings cited by Bloomberg, and Kaiser has visited Obama's aides 16 times since 2009. The foundation's owner, George Kaiser, reportedly made substantial donations to Obama's election campaign, possibly indicating a conflict of interest. Silver and Zients denied ever having personal interaction with Kaiser, and both insisted that they and their staffers were never pressured by anyone at the White House to give a green light to the Solyndra deal. Silver said he had "no reason to believe" that Kaiser's donations played any role in the process. 3. Do internal emails reveal that DOE staffers skipped or rushed necessary due diligence? Stearns produced transcripts of emails from DOE personnel regarding the timing of the highly publicized loan-guarantee approval, which he said contained "disturbing revelations." The approval was allegedly fast-tracked in order to coincide with Vice President Joe Biden's and DOE Secretary Steven Chu's appearances at Solyndra's ground-breaking ceremony. Portions of emails distributed by Stearns appear to support this assertion. "We would prefer to have sufficient time to do our due diligence reviews and have the approval set the date for the announcement rather than the other way around," an unidentified DOE staffer wrote in one of the messages. But Rep. John Dingell, D-Mich., urged his colleagues not to jump to conclusions. "I am still waiting to see something that shows wrongdoing," he said. "I don't want us to proceed just on suspicions or misinterpretations of emails." Zients, whose department assigns credit subsidy scores to DOE loan-guarantee applicants, insisted that the OMB reviewed Solyndra strictly according to procedure and, in fact, increased its credit subsidy score to make it more conservative in the final approval stages. "I want to be crystal clear … these scheduling requests had no impact whatsoever on the credit subsidy score that was given to the project," he said. 4.Should the U.S. government continue to invest in solar power? As to whether Solyndra's failure should cause the federal government to take a hard look at investing in any solar manufacturing projects or installations, the members of Congress largely took their stances along party lines. "I disagree vehemently with the policy conclusions my Republican colleagues have already drawn," said Rep. Henry Waxman, D-Calif. "They say Solyndra shows the failure of solar investments." "If you live in reality, you know that the world cannot continue its reliance on fossil fuels," he added, stating that ceasing federal support would be an "economic death sentence for fledgling renewable energy companies that have to compete against both heavily subsidized fossil-fuel firms and low-cost overseas companies." Those "low-cost overseas companies" include numerous China-based PV cell and module manufacturers, whose dominance in the marketplace was discussed numerous times during the hearing. According to Silver, the Chinese government has already committed more than $30 billion to several large manufacturers, in addition to providing other incentives. The U.S.' investments pale in comparison. Silver reiterated that the DOE loan-guarantee program allows the U.S. to begin to compete in what is projected to be a lucrative market. "I can't imagine a scenario under which we, as a country, will walk away from an industry that will be one of the biggest in the world," he said. Stearns, however, indicated that walking away from - or, at least, intensively questioning involvement in - the solar sector may be a good idea for the government. "Go back and look at all the solar energy projects, and you'll realize that this industry is truly dependent on subsidies," he said. "When you look at all this and do the analysis, even at $140 per barrel [for oil], the idea that solar panels are going to break even is questionable." Zients stressed that aside from Solyndra, other solar energy firms that have received loan guarantees are likely to deliver on their promises to the solar sector, U.S. taxpayers and the country as a whole. "The program is relatively new, so loans have recently closed, for the most part," he said. "We have every reason to believe that the portfolio, as a whole, will perform." |
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Comments
 | James Serene | Reply |
| 16 Sep : 10:27 | ||
The Solyndra Hearing: Squabbling, Accusations And Four Big Questions I just read a column by George Will where he uses Solyndra as an example to discredit the efforts concerning renewables. Then, I just happened to listen to NPR's show, Marketplace. A former Bush aid gave an editorial about Solyndra,and how government needed to stay out of the energy business and let the 'free market' have its way. Obviously a Carl Rove type has jumped on this issue as a means to discredit Obama, and to get more donations from the extraction industries. The finanicial losses to this country from Solyndra pales in comparison to what Halliburton cannot account for in Iraq, the wasted subsidies to the nuclear industry, etc., etc. Not to mention that we have opened the doors to cheap solar panels from China. This hearing is a carnival, and renewable energy proponents need to go on the offensive and expose this well orchestrated attack on clean energy and our efforts to decrease the flow of money to Saudi Arabia. | ||
| visualeyes108@yahoo.com | Reply |
| 16 Sep : 11:36 | ||
The Solyndra Hearing: Squabbling, Accusations And Four Big Questions The Chinese sell to ANYONE, but in the USA with OEM, only a few could ever be customers. Volume be damned! Where did OEM come from? | ||
| energyoutofthebox.com | Reply |
| 16 Sep : 12:18 | ||
The Solyndra Hearing: Squabbling, Accusations And Four Big Questions It is a bad new, but I think we will see new banckrupties in a short term. Nevertheless, the market will continue its slow growth, but it has to re-size to the actual demand. www.energyoutofthebox.com | ||
| Jim Smyth | Reply |
| 16 Sep : 21:02 | ||
The Solyndra Hearing: Squabbling, Accusations And Four Big Questions True the solar industry relies on subsidies, but so does oil and the utilities, lets start factoring in the wars, a cost for the pollution, the cost of healthcare, and the list keeps going on....once factored into oil and coal the little bit of money used to kick the solar industry in high gear is cheap!!! | ||
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| Anonymous | Reply |
| 18 Sep : 09:53 | ||
The Solyndra Hearing: Squabbling, Accusations And Four Big Questions I've recently had a number of customers express concern about installing solar PV systems because of the recent news regarding Solyndra and Evergreen. Do they reason to pause? What is the fall-out of US Solar Production Companies filing for Bankruptcy? How bad of a mark is this leaving on our Industry? This a pretty good article about how politics is now using the Solyndra debacle as a football. It's all not good news for our industry. Did the DOE process the 535-million loan guarantee too quickly without sufficient due-diligence, probably? The solar industry at the time of the awarded guarantee was going through rapid changes. Everyone was trying to find a way to create green jobs for America and Solar was a hot industry. Our industry has an annual growth of over 45 percent since 2005, with over 100,000 Americans now directly employed by solar and we are still fourth in the world in the production of electricity from solar. Incidents like that of Solyndra and Evergreen give us a black eye. One or two articles that are bad, offset hundreds of great solar industry facts. Having Congress now play the blame name only exasperates the entire problem. Our industry is going through rapid consolidation and more fall-outs will occur. The best will survive and the weak will go away. This should not be a surprise. The Coal and Oil Industries receive billion of dollars in subsidies every year and the same type of consolidation took place and is still taking place in that industry today. Either stop all subsidies, which will never happen, or realize the solar industry has every right to have our industry set as a National Strategic Priority as well. We haven't had an Energy Policy in this country in decades, and look where we are. Renewables have to be a part of stopping our foreign dependence. Solar has to be a big part of this solution!! | ||
| Randy Fasbinder | Reply |
| 18 Sep : 14:50 | ||
The Solyndra Hearing: Squabbling, Accusations And Four Big Questions Solyndra is the tip of the iceberg. This is not a White House scandal, it is a DOE scandal. Steven Chu and his whole staff should be fired. The controversy here is that DOE lied about doing due diligence and passed Solyndra through while intentionally delaying others that competed with DOE's officers business interests. The DOE could have safely diversified its bets with 40 small america business applicants but they blew the money on a few inside special interest applicants who paid lobby money while freezing out those small American businesses and jobs. Subpeona's will show that Lachlan Seward & Steve Spinner of the DOE, ordered staff and consultant's to change their review criteria and findings in order to manipulate winners and losers. Look into the ones that didn't get in because they didn't bribe the right people. The site: http://corruptiondoe.weebly.com has the real truth about Solyndra and beyond... It shows that: - Only campaign contributors received funding from the DOE ATVM and Loan programs and competitors to those interests were frozen out. - Key White House staff were informed of the misdeeds but they covered them up. - A criminally illegal protection investor money racket was being run by individuals in, and around, the DOE funding programs, Detroit and Goldman Sachs. - Detroit ordered all competing efforts killed off or permanently delayed. - Tesla is involved in the same influence-buying scam and financials fudging here Everybody knows about the site, above. Hundreds of thousands of people have seen it. Nobody can ignore the facts here. This was all pay-to-play. (OK to Forward this) | ||
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| brannon@purelogiccleanenergy.com | Reply |
| 19 Sep : 00:41 | ||
The Solyndra Hearing: Squabbling, Accusations And Four Big Questions Nobody's noticing that the investment risk was worth it because Solyndra is a genius system that solved the problem of putting solar on large, flat roofs. There are millions of acres of flat roof available (otherwise unusable space) that pose an engineering problem for ballasted systems. Solyndra brought a game-changing solution. One that would keep American ingenuity, manufacturing and jobs in America. It can be regarded as incredibly patriotic and self serving for our government to support such a company. The greater good is far more than the $535M invested. Anyone ever heard of the space race??? | ||
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