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Solar Pink Slip

Election politics portend painful cutbacks.

Fortnightly Magazine - December 2011

Whether it deserves it or not, the solar energy industry can’t count on continued government largess, thanks in part to the Solyndra mess. But in the end, Solyndra’s demise might be exactly what the industry needs to wean itself off heavy subsidies and become a mainstream resource.

A friend of mine was laid off recently. This was a big shock, because he thought he was essential to the operation. My friend, whom we’ll call Reggie, worked at the company for more than a decade. He was well liked and always got exemplary reviews. He didn’t actually enjoy his job, but the salary and benefits kept him comfortable. And now, he’s unemployed, and he still hasn’t come to grips with that fact. He hasn’t really started job hunting, and he’s still spending money like he has no worries.

I can sympathize with Reggie, because I’ve been there. I was laid off almost exactly 10 years ago, and at the time it was difficult to accept that my job was gone. But if you want to know a secret, I’m glad I lost that job. It forced me to re-think, regroup, and find a new path. Eventually, I think the same thing will be true for Reggie. He’ll find a different job that will allow him to achieve his potential.

Perhaps the solar industry could learn a similar lesson out of the Solyndra collapse. After all, despite strong support among American voters, solar energy faces growing discontent in policy circles, with lawmakers demanding greater accountability from taxpayer-supported companies. Someday, maybe soon, solar might find a pink slip in its inbox; a new Congress might well decide to lay off some or even all of the solar industry from the tax support payroll.

That will be the day solar energy is forced to grow up.

Pulling the Plug

In mid-November, DOE Secretary Stephen Chu appeared before a grim-faced panel of lawmakers on the House Energy & Commerce Committee, seeking answers about Solyndra’s financial troubles and its $535 million in DOE funding. Republicans spent several hours grilling the energy secretary, asking pointed questions about what he knew and when he knew it.

As Committee Chairman Fred Upton (R-Mich.) said, “DOE was receiving reports showing that Solyndra was bleeding cash and going bankrupt.” According to Upton, DOE was acting behind the scenes, “continually taking extraordinary steps to keep Solyndra on financial life support.”

The committee’s investigation seeks, in part, to determine whether DOE violated the Energy Policy Act when it restructured Solyndra’s loan early in 2011, and subordinated $75 million of it to Solyndra investors. Committee members also are asking whether the Obama administration engaged in influence peddling when it arranged funding for Solyndra and other companies whose executives and political action committees supported the campaigns of Democratic candidates. The House committee went so far as to subpoena the White House, demanding that the president release communications about Solyndra.

Assuming there’s no smoking-gun evidence proving a quid-pro-quo