I doubt the facts are going to matter much now that Republicans have latched onto the Solyndra solar “scandal,” and even if they did matter, I’d be the wrong guy to defend the Obama administration (and some of the world’s top venture capitalists) for making the same honest mistake I made. After a few dozen Solyndra hearings like the one in the House today, nobody’s going to remember the Bush administration was just as hellbent to make this loan. Nobody’s going to care that all successful loan programs have failures, that the Solyndra venture was barely 1% of the Energy Department’s $40 billion clean-energy portfolio, that there will still be over $2 billion in reserves for busted loans no matter how Solyndra shakes out. That’s politics.
But I do want to push back against the idea that Solyndra’s failure reflects some kind of failure of the solar industry. That’s just wrong. The solar industry is on fire, thanks to the same collapse in prices that doomed Solyndra.
In just the last two months, about 7,000 megawatts of new solar projects were added to the U.S. pipeline. That’s the equivalent of seven nuclear reactors, which is seven more than we’ve built in the last three decades. And that doesn’t include residential projects, like the unprecedented “Solar Strong” effort to install photovoltaic panels on 160,000 rooftops on military housing that was just announced last week. The U.S. solar market doubled last year, and it’s expected to double again this year, even though many states are reducing their subsidies. How many other industries are growing that fast in this economy?
Like every other U.S. energy source, solar is federally subsidized. The loan guarantee program has been a particularly crucial driver for unusually large or innovative projects, like Project Solar Strong or a 250-megawatt solar generation plant in the Mojave Desert that just finalized a $1.2 billion loan guarantee on Tuesday, and will provide clean renewable power for more than 50,000 homes. Last week, the Obama administration approved a $150 million loan guarantee to 1366 Technologies, a Massachusetts firm with a new manufacturing process that could cut the cost of silicon wafers 50% and make solar even more cost-competitive.
It’s true that these are tough times for solar-panel manufacturers. Solyndra had a cool technology, but it couldn’t produce panels cheap enough to compete with Chinese manufacturers that received over $30 billion in government funding last year. It’s also true that government loan programs are inherently messy; former Obama economic adviser Larry Summers really hated them. Jonathan Silver, the head of the loan program, once told me he’d stipulate that a strict carbon-pricing regime that penalized fossil fuels for their pollution would be a more efficient way of helping green energy compete on a level playing field. But the same Republicans who are mocking the loan program killed Obama’s cap-and-trade regime.
It never ceases to amaze me how Washington wise men seem to think of renewable energy as some kind of gee-whiz Jetsons technology. I was on some TV show with Sam Donaldson after Fukushima, and he scoffed that maybe we’d have wind and solar someday, but not in his lifetime. Dude! It’s here! Wind is now a bigger employer than coal. Solar is finally scaling up, which is why its costs are falling down. The notion that you have to plunk down $50,000 for a solar system is totally 2008. In much of the country, companies like Solar City and SunRun now finance deals where you plunk down zero dollars to get a panel on your roof, then pay for it with a fixed monthly fee that’s less than what you save on your electric bill.
The collapse of Solyndra is an embarrassing bump on the road to a clean-energy future. Maybe it’s a coincidence that the politicians who are hyping Solyndra tend to be the politicians who want to close that road. But we’re getting farther down the road than people realize. And it’s taking us where we need to go.