published Sunday, July 8th, 2012

Solar-powered insolvency

Is it too much to ask that the United States get through a few months without another massively government-subsidized solar energy company going belly-up?

Forget the half-billion-dollar boondoggle at now-defunct solar panel maker Solyndra. That's so last year.

Now it's a Loveland, Colo., concern by the name of Abound Solar that has said it will be filing for bankruptcy and closing shop.

Abound used up nearly $70 million of its $400 million federal loan guarantee before the rather less-than-vigilant U.S. Department of Energy cut off the gravy supply a few months back.

Now, Abound plans to lay off its 125 workers -- an interesting turn of events in light of the fact that Energy Department loan guarantees were, in the words of The New York Times, "intended to stimulate employment ... ."

Hard to figure, but somehow the federal government misjudged Abound's chances of success when it forked over a truckload of your tax dollars to the company.

"Our government is not good at picking winners and losers in the marketplace but has certainly proved it is good at wasting taxpayer dollars," U.S. Rep. Jim Jordan, R-Ohio, said after Abound made its not especially surprising announcement.

But look on the bright side: Abound was a relative bargain. California-based Solyndra had burned through almost all of its $535 million federal loan before it retired to the land of Edsels and New Coke.

Can it really be that Washington politicians and bureaucrats who have never run a business and never had to meet a payroll aren't in the best position to say which sorts of companies will make it and which ones won't? Is there a nugget of truth in the view that the free market is more competent than government when it comes to selecting and then rewarding manufacturers of superior mousetraps -- or solar panels or cars?

Nah, couldn't be. Washington would no more throw good money after bad in the solar power industry than it would lavish billions of dollars annually on counterproductive farm subsidies or on demonstrably failed programs such as Head Start.

Oh, wait... .

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nucanuck said...

The US doesn't have to have a solar industry, we can buy our solar products from China, the world leader in solar.

But as we fail to lead, we will continue to watch the accellerating wealth transfer from West to East. Have no doubt that solar is the energy of the future. Solar costs will come down and fossil fuels will continue to rise. At the cross-over point, our basket will be empty and we will be a former world power.

Go ahead, turn our backs on solar power.

July 8, 2012 at 12:49 a.m.

It's funny, you focus on a few companies you don't like, but ignore the booming solar market?

There's a reason solar installations are up...and yet you never ever mention that. Why?

That said, Head Start works, NCLB failed, and I'd be glad if they just bought solar panels from qualified US bidders to eliminate coal power plants.

July 8, 2012 at 1:42 a.m.
Plato said...

The fact of the matter is that the Abound default represents .2% of the total amount of the DOE alternative energy loan portfolio. If you want to add in Solyndra's piece that's another 1.4% for a total of 1.6%. The total amount of defaults from the $35 Billion loan program are about 4%. You can compare that to the SBA Loan Guarantee default rate of 12% and it looks pretty darn good. SBA loans are underwritten through participating banks and have to go through thorough bank scrutiny as well as government screening and approval.

Show me a bank that has less than a 4% default rate on business loans and I'll show you a bank that doesn't make small business loans.

Lenders, be they commercial or government entities or a combination of the two working together are not fortune tellers. You can have the most thorough and well research business plan in the world, have the expertise, the facilities, the markets, all the research etc. and STILL fail. Lending is like life insurance, it's all about probabilities. Everyone that buys a policy doesn't live to be 100 and you are not going to have every loan repaid no matter how thoroughly you do your homework. But if a substantial portion are repaid you make a profit.

When you think about the overall positive benefits to our country that are coming out of this program including one of the largest wind farms in the world and two electric vehicle manufactures which have created thousands of jobs and continue to grow, the cost of a few defaults is minimal.

Truth be told this is just another lame way of attacking the president and his efforts to spur the economy while make us less dependent on dirtier, polluting fossil fuels much of which comes from offshore.

http://www.lgprogram.energy.gov/

July 8, 2012 at 2:12 p.m.
conservative said...

Did you ever notice that Liberal kooks constantly push solar and wind power here for others but don't have it for themselves?

July 8, 2012 at 2:52 p.m.
conservative said...

The people in California are "still crazy after all these years."

They abandoned all nuclear power and replaced the Rancho Seco nuclear plant with solar. The nuclear plant produced 900 megawatts of electricity and the solar panels produce 4!

The nuclear plant produced 225 times the electricity of the solar power debacle!

The solar panels produce about 1/2 of 1% of the electricity that was produced by the nuclear plant!

http://www.city-journal.org/2008/18_2_californias_environmentalism.html

July 8, 2012 at 5:11 p.m.
stevedj_98 said...

Conservative:

A Liberal kook here who is having a SunPower solar array installed on my home roof THIS WEEK. I mainly wanted it to charge my 100% electric Nissan LEAF car, but the system will be large enough that I might not ever get a power bill from EPB again. In fact, I plan to make money with the TVA Green Partners program, that buys my excess electricity.

July 8, 2012 at 8:30 p.m.

Bad story as usual from conservative.

A 4 megawatt solar farm was built at the site, but the vast majority of it? Used for a variety of other purposes.

Given that the actual nuclear plant was highly unreliable, one can hardly blame the local utility for seeking other options.

And if you look, you can find that if they decided to do so, they could produce 200 megawatts there. But no, conservative can't bother to look up that detail. Just believes because they put a solar facility on the parking lot, that that is the limit of what they can do.

Except it's not.

July 8, 2012 at 8:46 p.m.
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