Solyndra, a solar energy company, recently went under – now one of three U.S. solar energy companies to declare bankruptcy in the past month and a half. Now the debate is whether Solyndra has wasted millions of dollars in taxpayer money while decreasing the number of green jobs, thus sparking a U.S. government investigation.
This was a “classic case of fraud and abuse and waste,” said Fred Upton (R-Mich.), chairman of the U.S. House Energy Committee.
“Unfortunately the Solyndra default is blood in the water,” said George Sterzinger, executive director of the Renewable Energy Policy Project. “And I think the loan guarantee will be elevated into the cross-hairs of political battles.”
When Solyndra recently closed its doors in California and trimmed green jobs, it faced the risk of losing $528 million in taxpayer money. That’s because the U.S. Treasury repays the private loan made to a company under the Recovery Act of 2009 when the company fails in the market. However, officials say the Solyndra loan is just 1.3 percent of the whole loan guarantee program – a $2.4 billion effort developed under the Recovery Act of 2009 to help increase green technology and green jobs in the United States.
“I think renewable energy remains one of the best long-term investments one can make as long as you’re careful to pick your companies,” said Garvin Jabusch, chief investment officer at Green Alpha Advisers. “If some companies go bankrupt, this is just normal capitalism.”
Solar Energy Companies Similar to Solyndra Remain Strong in America, but Stronger Overseas
The solar energy market actually doubled from 2009 to 2010 in the United States. In addition, more than 24,000 green jobs – an increase of 26 percent – is slated to develop over the next year in the solar energy industry, according to the Solar Energy Industries Association.
However, solar energy industry growth is more prevalent in overseas nations such as China, where companies can generate solar panels at a fraction of the cost that American companies can because the Chinese government devoted $33 billion to the industry last year.
Solyndra generated $3 per product, but the products cost $7 each to produce. This was due in part to the fact that Chinese products were so much cheaper, thus decreasing the price for solar energy products overall.
“What Solyndra really speaks to is the large issue of how government intervention can sort of hide the normal profit-and-loss signals that direct private investors,” said Lachlan Markay, an investigative reporter with a conservative think tank known as the Heritage Foundation.
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