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Last night my wife and I had dinner with a couple who are old-time friends.

While discussing several political and economic policy subjects, they seemed surprised that the loan program that funded Solyndra was started under President Bush. They thought the whole story was that once in office, Obama rushed a loan deal to political supporters - and then they went bankrupt.

He wanted to know more, so I put together the following. I told him, "Here are some facts about the company and the loan, which I welcome you to investigate and push back on, if there is contrary factual evidence."

You may have right-wing leaning friends who harp on the Solyndra deal - I hope this summary comes in handy for those situations.

This is material compiled from CNN and Think Progress and others, with updates.

Summary follows below the fold:

   1.  The program to provide funding for "renewable energy projects"€ was started by Bush in 2005. As reported back in September 2011, the "œBush Administration advanced the idea of the Solyndra loan guarantee for two years"€ before Obama became President. Here is a documented timeline of the events:

    May 2005: Just as a global silicon shortage begins driving up prices of solar photovoltaics [PV], Solyndra is founded to provide a cost-competitive alternative to silicon-based panels.

    July 2005: The Bush Administration signs the Energy Policy Act of 2005 into law, creating the 1703 loan guarantee program.

    February 2006 -€“ October 2006: In February, Solyndra raises its first round of venture financing worth $10.6 million from CMEA Capital, Redpoint Ventures, and U.S. Venture Partners. In October, Argonaut Venture Capital, an investment arm of George Kaiser, invests $17 million into Solyndra. Madrone Capital Partners, an investment arm of the Walton family, invests $7 million. Those investments are part of a $78.2 million fund.

    December 2006: Solyndra Applies for a Loan Guarantee under the 1703 program.

    Late 2007: Loan guarantee program is funded. Solyndra was one of 16 clean-tech companies deemed ready to move forward in the due diligence process. The Bush Administration DOE moves forward to develop a conditional commitment.

    October 2008: Then Solyndra CEO Chris Gronet touted reasons for building in Silicon Valley and noted that the "€œcompany's second factory also will be built in Fremont, since a Department of Energy loan guarantee mandates a U.S. location."

    November 2008: Silicon prices remain very high on the spot market, making non-silicon based thin film technologies like Solyndra's very attractive to investors. Solyndra also benefits from having very low installation costs. The company raises $144 million from ten different venture investors, including the Walton-family run Madrone Capital Partners. This brings total private investment to more than $450 million to date.

    January 2009: In an effort to show it has done something to support renewable energy, the Bush Administration tries to take Solyndra before a DOE credit review committee before President Obama is inaugurated. The committee, consisting of career civil servants with financial expertise, remands the loan back to DOE "€œwithout prejudice"€ because it wasn't ready for conditional commitment.

    March 2009: The same credit committee approves the strengthened loan application. The deal passes on to DOE's credit review board. Career staff (not political appointees) within the DOE issue a conditional commitment setting out terms for a guarantee.

    June 2009: As more silicon production facilities come online while demand for PV wavers due to the economic slowdown, silicon prices start to drop. Meanwhile, the Chinese begin rapidly scaling domestic manufacturing and set a path toward dramatic, unforeseen cost reductions in PV. Between June of 2009 and August of 2011, PV prices drop more than 50%.

    September 2009: Solyndra raises an additional $219 million from private investors. Shortly after, the DOE closes a $535 million loan guarantee after six months of due diligence. This is the first loan guarantee issued under the 1703 program. From application to closing, the process took three years – not the 41 days that is sometimes reported.  OMB did raise some concerns in August not about the loan itself but how the loan should be "scored" [for its budget implications]  OMB testified that they were comfortable with the final scoring.

    January -“ June 2010: As the price of conventional silicon-based PV continues to fall due to low silicon prices and a glut of solar modules, investors and analysts start questioning Solyndra's ability to compete in the marketplace. Despite pulling its IPO (as dozens of companies did in 2010), Solyndra raises an additional $175 million from private investors.

    November 2010: Solyndra closes an older manufacturing facility and concentrates operations at Fab 2, the plant funded by the $535 million loan guarantee. The Fab 2 plant is completed that same month — on time and on budget — employing around 3,000 construction workers during the build-out, just as the DOE projected.

    February 2011: Due to a liquidity crisis, private investors provide $75 million to help restructure the loan guarantee. The DOE rightly assumed it was better to give Solyndra a fighting chance rather than liquidate the company, which was a going concern, for market value, which would have guaranteed significant losses.

    March 2011: Republican Representatives complain that DOE funds are not being spent quickly enough.

    House Energy and Commerce Committee Chairman Fred Upton (R-MI): "despite the Administration's urgency and haste to pass the bill [the American Recovery and Reinvestment Act], billions of dollars have yet to be spent."

    And House Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL): "The whole point of the Democrat's stimulus bill was to spend billions of dollars... most of the money still hasn't been spent."

    June 2011: Average selling prices for solar modules drop to $1.50 a watt and continue on a pathway to $1 a watt. Solyndra says it has cut costs by 50%, but analysts worry how the company will compete with the dramatic changes in conventional PV.

    August 2011: DOE refuses to restructure the loan a second time.

    September 2011: Solyndra closes its manufacturing facility, lays off 1,100 workers and files for bankruptcy. The news is touted as a failure of the Obama Administration and the loan guarantee office. However, as of September 12, the DOE loan programs office closed or issued conditional commitments of $37.8 billion to projects around the country. The $535 million loan is only 1.3% of DOE's loan portfolio.

    Meanwhile, after complaining about stimulus funds moving too slowly, Congressmen Fred Upton and Cliff Stearns are now claiming that the Administration was pushing funds out the door too quickly: "In the rush to get stimulus cash out the door, despite repeated claims by the Administration to the contrary, some bets were bad from the beginning."

What critics fail to mention is that the Solyndra deal is more than three years old, started under the Bush Administration, which tried to conditionally approve the loan right before Obama took office. Rather than "pushing funds out the door too quickly," the Obama Administration restructured the original loan when it came into office to further protect the taxpayers'€™ investment.

    2.  Congress thought there would be more failures: Two companies have declared bankruptcy under the loan program so far, out of the 33 projects funded. Congress was expecting more. Congress appropriated money to cover expected losses, and multiple independent reviews have confirmed that the actual losses will likely be less than Congress expected.

    3. Solyndra wanted more: The company applied for another $468 million in funding shortly after its first DOE loan closed. The government did not award the second request.

    4. Taxpayers aren't the only losers: Private investors lost almost twice what the government did -€” nearly $1 billion. While much has been made that the largest private investor was an Obama supporter, the second largest was a fund controlled by the Walton family, of Wal-Mart fame. Walton family members are noted Republican donors.

    5.  The renewable program is closed: The renewables loan program that funded Solyndra and other wind and solar ventures is now over. There is still $170 million available for renewables under a separate program that also handles nuclear power.

    6.  No smoking gun with Solyndra wrongdoing: Last week Mitt Romney said an inspector general "looked at this investment and concluded that the administration had steered money to friends and family." That appears to be incorrect, as no evidence of undue influence peddling by the White House has been uncovered in an official, independent report. As a major Bloomberg analysis of Solyndra and the media hype of the story concluded, "€œThe Focus on Solyndra Is Not Proportional to Its Impact."

    7. Solyndra isn't a typical solar company: Solyndra did not make regular, flat solar panels. It made a more advanced, cylinder-shaped device designed to capture the sun's rays on its entire surface -” hence the company's name. It was the rapidly declining price of traditional, flat solar panels and silicon -€“ mostly from China -” that did the company in.

If this is different than your news sources have portrayed, you might want to broaden your sources of news. If you find contradictory information, I'€™d like to see it.

You've heard the expression, "€œWe're all entitled to our own opinions, but not our own facts"€.  Until we can agree on facts, people will just be talking past each other.

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Comment Preferences

  •  Tip Jar (15+ / 0-)

    Faith is not believing something which our intelligence denies. Faith is the resolve to place the highest meaning on the facts which we observe.

    by mondaymedia on Mon Jul 23, 2012 at 08:50:20 PM PDT

  •  It's just more energy than it's worth (2+ / 0-)
    Recommended by:
    hungeski, TracieLynn

    I mean, not in your circumstances.  It sounds like you talk well with your right wing leaning friends (how you can stand that is a mystery to me) and it's great if they listen to you.  But just like with every Fox/GOP launched 'scandal' thingy on Obama, the right just gets us to chase our tails on crap like this.  I prefer not to give it any oxygen.  

    The Bush administration was losing trucks full of cash that they borrowed from China.  How many billions went missing in Iraq during the nation's shameful wargasm?  Unrepentant right wingers throwing accusations about money spent here in America in attempts to get the economy going and spark the renewable energy industries are just so full of shit, the details aren't worth getting into.  They don't deserve your patience.

    Clearly they don't have mine.  ;-)

    When the truth is only a matter of opinion, advantage goes to the liars.

    by Sun dog on Mon Jul 23, 2012 at 09:29:36 PM PDT

    •  They are people who can be brought around (5+ / 0-)
      Recommended by:
      Renee, splashy, KenBee, TracieLynn, Sun dog

      They are not ideologues - for instance they see the value of Medicare for all - or any other single payer system.

      These are just low-information voters who have limited sources of facts.

      Also, discussing these things hones my skills by understanding what is coming from the right, and how to fight back.

      Faith is not believing something which our intelligence denies. Faith is the resolve to place the highest meaning on the facts which we observe.

      by mondaymedia on Mon Jul 23, 2012 at 10:31:05 PM PDT

      [ Parent ]

    •  Solyndra was a bad investment (1+ / 0-)
      Recommended by:
      Sun dog

      Once it got part the initial funding/technology demonstrator phase, it was passed over by numerous, knowledgeable VCs in the industry as a commercially unfeasible technology, which is why the original VC funders then took the political route to sell it to the US government.

      And, quite unfortunately, the inevitable failure of the company has done lasting damage to the US solar industry in terms of obtaining what could be productive government funding.

      Where we might agree is that Busco wasted vastly greater amounts of money on counter-productive wars, lining their buddies pockets, and that the relatively modest failure of Solyndra is a comparative drop in the bucket that has been distorted for political advantage.

      But that does not make this diary Right-Wing talking points; it is basically accurate.

      What about my Daughter's future?

      by koNko on Tue Jul 24, 2012 at 05:34:52 AM PDT

      [ Parent ]

      •  I don't believe it is (1+ / 0-)
        Recommended by:
        koNko
        But that does not make this diary Right-Wing talking point

         And I agree that the diary is basically accurate.

        I just don't feel like right wingers deserve a defensive response on this from the position of an Obama supporter.  They deserve criticism for trying to pretend that this is some "Chicago style" scandal on the part of the President because that's horsehockey.  They've been suckered by Fox/GOP and that's the real shame.  

        What happened with Solyndra was unfortunate and criticism was appropriate.  But it wasn't lying to start a war in Iraq.  Or lying about the effects of huge tax cuts to rich people.  It's not even the same thing in nature as a real scandal.  It was one part, that didn't go well, of a larger program that spent money here in America for good intentions.  The dark and spooky insinuations about Obama being corrupt because of it is the actual lie here.  The fact that they can sell that to so many people is the scandal.  

        They did the same thing with this that they did with the whole "Czars" thing.  Just manipulation of ignorant people.  My only point with the diarist is that they do this in order to keep us on the defensive and the actual details don't really matter to them or their supporters.  It just sounds like a scandal to them.  I think that whole propaganda culture is a far bigger scandal than anything to do with Solyndra and prefer to stay on the offensive.  

        When the truth is only a matter of opinion, advantage goes to the liars.

        by Sun dog on Tue Jul 24, 2012 at 07:12:55 AM PDT

        [ Parent ]

        •  Absolutely Repubs used this (1+ / 0-)
          Recommended by:
          Sun dog

          to give Obama a black eye, just as they use any opportunity to do so.

          Personally, I give Obama credit for do as much as he could with the limited funding available, and there is always risk in funding start-ups (I work in the tech sector and if you haven't worked in a failed start-up you "lack experience" - really) as Mr. Romney knows (he backed a couple as Gov).

          But honestly, Solyndra was a bad deal before it ever got to the DOE under his predecessor.

          What bothers me about this deal is why the basic premise to fund it - an assumption that a historic aberration in the price of commodity material in a notoriously cyclical industry, slipped through the cracks of the vetting process (I'm sure it had "help").

          Lesson learned, I hope. Time to move on.

          The good news is that, despite the present Congress, US corporations such as GE are doing investment that will pay off and there will be other opportunities.

          What about my Daughter's future?

          by koNko on Tue Jul 24, 2012 at 07:56:54 AM PDT

          [ Parent ]

  •  I would add this (2+ / 0-)
    Recommended by:
    TracieLynn, Sun dog

    First ...

    7. Solyndra isn't a typical solar company: Solyndra did not make regular, flat solar panels. It made a more advanced, cylinder-shaped device designed to capture the sun's rays on its entire surface -” hence the company's name. It was the rapidly declining price of traditional, flat solar panels and silicon -€“ mostly from China -” that did the company in.
    This was not "more advanced" technology. Rather, it was "guaranteed to be more expensive" and "guaranteed to be difficult & expensive to improve" exactly because it used cylinders which:

    (a) Required a majority of the production equipment to be custom designed, making it more expensive to buy, maintain and upgrade than industry standard flat panel equipment, and;

    (b) Required a unique, form-factor and volume-constrained manufacturing process that virtually ensured the company would have to fund growth internally verses leveraging established (and scalable) industry supply-chains.

    (c) Ensured the company would have to internally fund and develop process improvements or spend more than competitors to adapt improvements from flat panel processes to their form factor.

    Second, their claim cylindrical forms are more efficient than flat panels were clearly nonsense for several reasons:

    (a) The tubes were spaced on racks (non-fuctional empty space; "unwound" these cylinders used similar area as a flat panel.

    (b) Claims the round shape "optimized" solar absorption were laughably false; rather, the round shape minimized the area of the section optimally exposed at any given time. Likewise the claim that the underside of the tubes "increased" adsorption by capturing (lower intensity) reflected light. These claims were so scientifically unsound it amazes me how they ever passed a technology review process.

    Reasonably, the only actual advantage that could be claimed is they used less Si on a unit basis but as you correctly noted the "cost-effectiveness" of this was based on a short-term historical spike in the price of Si.

    Basically, Solyndra technology was doomed to failure/obsolescence and a very bad public investment that should never have been funded as a production process.

    The back story, in simple terms, is some clever venture capitalists who had made risky and ultimately bad first & second round VC funding of a start-up sold the government a bill of goods by leveraging political connections.

    And sadly, the Obama Administration, hot on funding "shovel-ready" Green Tech projects, failed to exercise due diligence, falling into a hole dug by the previous administration, which has done serious political damage to clean tech funding.

    I really hope this is lesson learned and he will get another shot in his second term.
     

    What about my Daughter's future?

    by koNko on Tue Jul 24, 2012 at 05:25:33 AM PDT

    •  at what point do we determine it's "bad"? (0+ / 0-)

      Clearly the company had novel technology.  But we don't know the feasibility of it until you try it. that is what the whole start-up culture is about.  you throw money at ideas and sometimes they bear fruit.  Often times, they do not.  

      We also have to be committed to the long term.  The economics of an idea may not make sense in the short or medium term, but it may be the right thing to do in the long term.  Just like the whole notion of solar versus fossil fuels.  If we just used strict accounting principles, fossil fuels would win for the foreseeable future but the very use of fossil fuels costs us all.  

      --Mr. President, you have to earn my vote every day. Not take it for granted. --

      by chipoliwog on Tue Jul 24, 2012 at 07:20:34 AM PDT

      [ Parent ]

      •  In this case, it's very simple to define "bad" (0+ / 0-)

        The key point - regardless of the technical issues I detailed above - is the rationale DOE funding of the project was based on, which the diary elaborates (so I didn't).

        The key "advantage" of Solyndra was "cheap". At a time when PV grade Si was at a historical high, the fact that the Solyndra process used less Si than a conventional Si flat panel made it look cheap on paper assuming the price of Si would remain constant or increase indefinitely.

        That assumption defines "bad" and anyone with a chart of historical Si commodity pricing (including the predictable cyclic commodity pricing swings) would question it - and it was questioned, including by many industry VCs that passed on it.

        Everything else I elaborated explains why, absent peak Si pricing, their product was actually more expensive to the point of being impossible to sell at a profit.

        Question: is "novel" necessarily "good" or "better"?

        The problem with IC, FPD and thin film PV technology is that it requires constant innovation and improvement, and the cylindrical form factor they used pretty much guaranteed that would be impossible to execute on production scale, hence my personal skepticism about their technology.

        This was not small change funding of lab-scale "proof of concept" demonstrators (where such risk is acceptable until the questions are exhausted) but financing of a production plant requiring loan guarantees for several hundred million dollars of capital equipment, aka, "the real world".

        And then those bastards lied to cover their tracks making the industry and the Obama Administration look bad, poisoning the well and giving anti-green f**K-heads ammunition for political sandbagging.

        Inexcusable.

        What about my Daughter's future?

        by koNko on Tue Jul 24, 2012 at 09:34:08 AM PDT

        [ Parent ]

        •  I see you're passionate about this subject (0+ / 0-)

          I think the result of their unwinding had political fallout because the Republicans chose to make political hay out of it.  But you could choose any number of accountability issues under previous administrations backing of projects at this scale.

          The proper response is to a) show your successes and b) show the failures when the other side was in power. and c) that this company as the timeline shows got its government assistance application approved during the previous administration.  

          Further, if this company as you claim was such a bad bet, why was there such a large private investment?  Private investors are notoriously risk averse.  Sounds like the Walton family is out close to half a billion on this company? Which of course they'll simply write off and deduct against windfalls they'll make in the future.

          --Mr. President, you have to earn my vote every day. Not take it for granted. --

          by chipoliwog on Tue Jul 24, 2012 at 10:40:03 AM PDT

          [ Parent ]

          •  It had some idiot investors (0+ / 0-)

            I work in the IC industry, which is related (PV is our "poor cousin") and Solyndra was shopped-around the VCs in the industry.

            The investors in Solyndra were mainly from outside the industry and got sold a bill of goods. Industry players (who often make 1st or 2nd round funding investments in promising technologies to see where they go) stayed away and the reason is the fundamentals were not good. If you were to search PV technology R+D roadmaps, I'm confident you will not find Solyndra on any because they had no performance benchmark achievements or notable accomplishments, just a gimmick.

            Solyndra did not attract such knowledgeable investors. Maybe ask yourself why, and if investment by Walmart is a reliable indictor of sound PV technology (well, OK, they sell solar panels, maybe they know something I'm missing).

            Am I pissed? A bit, because this poisoned the well for others and set the industry back, politically speaking. A lot of the blame for that goes to Republicans who used the situation, but some goes to the principles of the company that sold a bill of goods and ultimately lied to cover their asses.

            Why should I excuse that? Bad actors make it hard for good actors, who have enough real problems to deal with; start-ups with much better technology have failed for various reasons. PV is a tough, capital-intensive business.

            Anyway, it's history now. Other opportunities will come. Some of the worker-bee engineers in Solyndra did some good work, hope they do better next time.

            What about my Daughter's future?

            by koNko on Tue Jul 24, 2012 at 10:37:56 PM PDT

            [ Parent ]

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