Solyndra Hearing Cranks The Heat

After four hours of angry debate at a Sept. 14 congressional hearing, House Republicans and Democrats shared a rare moment of agreement: The Department of Energy made a really bad decision two years ago when it offered Solyndra, a California solar equipment manufacturer, a $530 million government-backed loan guarantee.

Two weeks ago, Solyndra went bankrupt, making it likely that taxpayers will be on the hook for the loan default.

Still, House Democrats voiced support for the overall idea of loan guarantees and other support for clean energy projects. But Republicans on the House Energy & Commerce Oversight & Investigations Subcommittee blasted the Obama Administration’s energy policy decisions.

Oversight subcommittee Chairman Cliff B. Stearns (R-Fla.) warned that the Solyndra bankruptcy is symptomatic of larger problems with President Barack Obama’s leadership and raises doubts about the Administration’s efforts to stimulate the economy. In particular, Stearns criticized the Administration for “touting its green energy plan as a savior of our faltering economy.”

Backed up by excerpts from e-mails made public at the hearing, Republicans charged that the White House put pressure on DOE staff to quickly issue the Solyndra loan despite concerns about the company. The e-mails were part of some 35,000 pages of documents subpoenaed by the subcommittee.

Defending the loan guarantee program and process were Jonathan M. Silver, director of DOE’s Loan Programs Office, and Jeffrey D. Zients, deputy director of the Office of Management & Budget. The Solyndra loan was vetted properly, they said, despite pressure to speed the process.

The program, Silver noted, was intended to support cutting-edge technologies with “great potential to create jobs” and to encourage nongovernment investments. Along with solar, nuclear energy projects are among those eligible for the loan guarantees.

Silver pointed out that similar programs exist in competitor countries, particularly China, which issued $30 billion in solar industry loan credits last year. China’s share of the global, trillion-dollar solar panel market grew from 6% to 54% in six years, he said, while the U.S.’s share plummeted.

Solyndra, Silver continued, made unique thin-film solar modules that used less polysilicon and were easy to install. Its product was expensive, however, particularly compared with the conventional flat panels made in China, and this proved deadly to the company as the price of conventional panels dropped 42% this year.

Solyndra was one of the original applicants for the loan support program, which Congress created in 2005 during the George W. Bush Administration. At the time, DOE ranked the firm near the top of all applicants, Silver said. However, DOE officials in the Bush Administration were regularly skewered at congressional hearings because they never issued the loan guarantees. Members were particularly vexed by DOE’s failure to back loans for new nuclear power plants.

Within a month of taking the helm at DOE in 2009, Steven Chu, Obama’s energy secretary, announced a new streamlined loan program to cut paperwork and speed release of guarantees (C&EN, Feb. 23, 2009, page 10). Within two months—and after the infusion of stimulus funds—DOE announced the Solyndra guarantee in March 2009.

Solar projects—some 18 in all and worth about $14 billion—are the largest category of 42 projects in the works under the loan guarantee program. The next largest category is nuclear energy projects, with $11 billion in potential guarantees.

Loan guarantees for solar programs engendered the most criticism from committee Republicans. Stearns closed the hearing by urging the Administration to reexamine its commitment to solar loan guarantees, noting that “even [with oil] at $140 a barrel, the idea that solar will ever break even is questionable.”