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Sep 302011

By Barbara Kessler
Green Right Now

I may be the last person in the blogosphere to report this, but here it is: Solyndra failed, but the U.S. solar industry is alive and well, and we should think hard about how to keep it that way.

Solar panels at a school in the Bay Area do double duty as shade for parked cars.

I’ll spare you a big rehash of the Solyndra solar flame out, which you can read about in many places. (Here’s a good column that aims for perspective). This company set up shop with a new technology that captured solar energy with cylinders that didn’t use silicon. That was intriguing to many investors, including the U.S. Department of Energy which promotes innovation by backing loans to selected ventures. The price of silicon had long rendered conventional PV panels unaffordable for most people, and that gave Solyndra a potential market edge. The company’s plans were plausible and DOE began the loan process during the Bush Administration, and locked in later, under the Obama Administration.

Long story short, in 2010 the price of silicon fell dramatically, and Solyndra’s value proposition began sliding off a cliff. And there  were management issues. Solyndra began its decline toward bankruptcy. The officers haven’t been forthcoming in relating the inside story; more will come out over time. The government, which gave Solyndra a relatively large loan guarantee of $535 million, should definitely take a lesson. Where the DOE overseers shrewd enough when scrutinizing the project? Did they demand transparency? Who was on the scene? All these are fair questions.

Meanwhile, we should remember that businesses fail, sometimes even after nearly succeeding, and also that the private sector isn’t necessarily any better at overseeing investments. Remember that housing market collapse way back, oh, about three years ago.

No one can be happy about this huge loss. But hindsight is 20/20, and to say that the government should now bail out of offering seed money to clean tech, as is being suggested by some, is a much larger discussion. One we can’t contain here. There are good arguments for reshaping government programs. Government can miscalculate. Remember when corn ethanol was going to free our nation from oil dependence and solve carbon pollution; when countless politicians campaigning in 2008 wanted to throw billions at corn producers?

There are just as many arguments in favor of a government role in supporting renewables. One, put out by the Solar Energy Industry Association, is simple: Other countries are supporting the transition to clean energy and if the U.S. doesn’t it will lose the manufacturing and development jobs to our competitors. Clean tech also needs the support to help level the playing field with fossil fuel producers, who have long received government subsidies.

So as the pendulum swings away from the Solyndra bonfire, we’d better watch out that it doesn’t knock us off the platform into a gully from where we’re forced to watch the world zoom by, advancing and benefiting from green energy.

It’s a serious risk. China offers generous subsidies to solar and wind endeavors, and these industries are advancing at record speed in the nation that owns so much of our U.S. debt.

There is an alluring argument out there that we should strip away all government supports for clean energy, as well as for the existing oil, coal and nuclear industries. That would level the playing field and solar, wind and geothermal power would race ahead. Well, maybe. It would set up a true marketplace competition. But really, that’s going to happen? Germany recently announced it is done with nuclear power, and the world shuddered at this brave move. In the U.S., the words “end oil subsidies” seize up the windpipes of most politicians. So while I too wish we could have a non-taxpayer supported, free-market leveled playing field, this just ain’t happening.

The good news, however, is that the U.S. solar scene, supports and warts and all, is a growing, thriving industry in the U.S. It employs about 100,000 workers and remains a world leader in development. For now. And its reach is expanding.

With the price of photovoltaic (PV) panels having fallen by about 30 percent in the last 18 months, there are growing opportunities for regular Americans to finally take advantage of this technology and help start lowering carbon emissions, the big prize that we should all be targeting.

  • This week Google announced another investment in solar. The Internet giant says it will provide $75 million to build 3,000 residential solar systems. They’ll own the panels and get payback from lease payments from the homeowners and government rebates. The idea is to support small local installers across the country by helping them offer financing plans for home PV installations, which typically run about $30,000 — give or take, depending on the size of the home. Google already made an eye-popping $280 million investment with SolarCity to advance solar rooftops through leasing arrangements.
  • Also this week, OneRoof Energy, a San Diego company that works directly with roofers to offer leased solar systems, announced it has secured $50 million in funding. OneRoof’s roofer partners install solar at the same time a homeowner buys a new roof, and leases the installation for payments that typically come in lower than the homeowner’s savings on electricity costs.

Other companies like Sungevity also are offering solar-leasing similar plans.

These leasing plans allow regular middle-class homeowners to essentially lease out their roof for solar power collection, lowering their bills and feeding the grid, without facing a large upfront investment that working people simply cannot afford. It’s a concept that been in the marketplace for a few years, but with new lower panel costs, appears poised to sweep the country.

Meanwhile, some larger commercial projects, and solar manufacturing, continue to create jobs and green energy in the U.S., albeit with government loan guarantees.

The solar industry overall grew by 69 percent last year, making it one of the fastest growing sectors in a recession-bound economy and the fastest growing energy sector, according to the Solar Energy Industry Association (SEIA). In addition, the U.S. was a net exporter of solar products in 2010 by $2 billion, sending components even to China, a major manufacturer of PV panels.

Solar is creating jobs, not just in the Silicon Valley, where the technology is refined, but in many states. In the last two years, according to SEIA, 27 new solar manufacturing facilities have been opened or announced for plants in Arizona, Ohio, Michigan, Mississippi, Pennsylvania and Tennessee.

SEIA also issued a statement about the Solyndra affair, pointing out that the DOE’s Energy Loan Guarantee Program helps make solar power more affordable for businesses and homeowners because each $1 from DOE leverages $13 in private investment.

That makes the DOE investments in solar ventures look a lot smarter than its new-found critics want to acknowledge.

The Solyndra debacle has created a cloud, but the big picture for solar remains mostly sunny.

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