Solyndra - Let's Keep It Real Folks

Election year politics ensure that Solyndra is going to get at least a full news cycle's worth of attention. Here are some interesting facts to consider as the Solyndra kerfluffle builds steam:

• Solyndra was a very small piece of the policy picture - Solyndra's $535M loan is just 1.2% of the total $38.6B loan guarantees issued by DOE. (Source: DOE.)
• All energy is subsidized and loan guarantees are equal opportunity - Guess who the biggest loan guarantee went to? Some big wind or solar boondoggle? Guess again: an $8.3B loan guarantee for a nuclear plant down in Georgia. (Source: DOE.)
• Solyndra is not the 'solar industry' - Solyndra failed precisely because conventional silicon-based solar is doing so well--the solar industry has reduced the cost of solar by 70% since 2009. Solyndra had a $2/Watt technology trying to compete against $1/Watt silicon PV.
• Not all solar needs loan guarantees - Large scale silicon-based solar PV projects can be financed without loan guarantees. My company is currently financing almost $2B of solar projects, none of which will rely upon loan guarantees. That's because silicon-based solar is highly reliable and has decades of proven performance--making it very attractive to investors seeking low-risk returns.
• It's not China's fault - China's subsidized loans to PV manufacturers account for maybe a 10% price advantage relative to non-Chinese competitors offering similar silicon-based products. It can't possibly explain the 100% price gap between Solyndra and today's PV. The explanation? Silicon , which was trading at $300/kg+ when Solyndra started, is now at $45/kg and falling. It's that simple.

None of this is meant to minimize the significance of the loss--$535M is a lot of money and if there was any misbehavior in how the loan was awarded it should be dealt with to the full extent of the law--but perspective is important.

Comments

[Chris Williams]

Arno,

Great way of thinking about the story. Thank you for sharing and providing talking points that we can all use to rebuke any attacks the industry will receive.

I also love the frame "Solyndra shows the industry is succeeding as module prices have fallen 67% in the last 3 years"

Chris