Facts about Solyndra Bankruptcy Case

Solyndra Inc. is back in the news and is now a hot political issue in the presidential election, sharply dividing Democrats and Republicans on the issue of wasteful spending, energy policy and the direction of economic policy. To understand this political debate and its implications for US energy policy, it is important to know the basic facts about Solyndra’s case.



Brief history of Solyndra Inc.

Solyndra Inc. was founded in Silicon Valley in 2004, producing specialized cylindrical solar panels for commercial rooftops. The company came up with an innovative technology of building solar panels without polysilicon. The idea behind this innovation was that due to exorbitant polysilicon prices, solar panels that were built without it would have a major advantage in the market. The other projected benefit of these solar panels was that they were supposed to be cheaper to install than their competitors.

Since the company seemed to have a promising future, in 2005 it was invited to apply for a government-guaranteed loan under the Energy Policy Act that was enacted that same year. This law was backed by bipartisan support under the the Bush administration and was designed to support innovative renewable energy technologies. In 2008, the Department of Energy started reviewing Solyndra’s application and in March 2009, Energy Secretary Steven Chu announced a $535 million conditional loan guarantee to Solyndra Inc. The loan was formally announced in September 2009, and was funded with stimulus money; the problem was that by that point Solyndra was already in deep financial trouble that eventually lead down the road to Solyndra’s bankruptcy.

Why Solyndra went bankrupt

There were a number of factors that converged together causing Solyndra’s collapse. The reality is that none of these factors could have been foreseen or prevented, given the nature of the company’s product.  The first factor was that in February of 2008 the price of polysilicon began to fall sharply, taking away Solyndra’s solar panels’ advantage in the market place.



The second factor was a dramatic collapse in the price of solar panels that took place in 2011 and can in large part be attributed to the fact the Chinese solar panel manufacturers started to squeeze out American solar panel manufacturers, like Solyndra, out of the market. The company’s solar panels were relatively expensive from the start, but cheap solar panels from China made Solyndra’s prices super uncompetitive, and the company did not have enough large commercial clients to create the necessary economies of scale.

Another contributing factor was that natural gas prices also fell during the same time period, which made investments into a comparatively more risky and expensive solar industry a lot less attractive. This in turn contributed to the fact that the firms’ executives failed to raise required additional capital that would have kept the company afloat. Solyndra filed for bankruptcy in September of 2011, was forced to shut down its Fremont factory and fired around 1,100 workers.

Grounds for a Congressional investigation and subsequent scandal

image of Obama visiting Solyndra before bankruptcy A Republican Congressional committee has been investigating the loan allocated to Solyndra Inc. since 2010. Internal administration emails that have been released show the the White House was warned on numerous occasions and from numerous trusted sources in the venture capital world the Solyndra was in trouble and will likely go under. Despite these warnings, the administration pressed on with the loan and internal administration emails reveal that the Energy Department asked Solyndra to delay layoffs until after 2010 midterm elections.

In December 2010, the firm failed to make a payment on its federal loan, thereby violating its terms. Despite this, the administration continued to financially support the struggling company, keeping it afloat. In February 2011, the Department of Energy restructured Solyndra’s loan, and found new investors, who gave the company an additional $75 million in financing. One of Solyndra’s largest investors was a major Obama supporter and financial bundler, George Kaiser. To be sure, the company had a number of key Republican investors as well. These actions by the White House came to be considered as misguided management of funds, and Mitt Romney went as far as accusing President Obama of cronyism and handing out money to his friend’s businesses.



Related Article: Solar metal roofing – roof-integrated thin-film PV panels

The Implications of Solyndra’s Scandal & Bankruptcy on Future US Renewable Energy Policy

image of Obama visiting Solyndra before bankruptcy For anybody keeping an eye on developments in the US solar industry, one thing is blatantly clear: solar industry and domestic renewable energy industry as a whole has become a hot political issue, fueled by the upcoming presidential election.

While President Obama saw the domestic renewable energy industry as paving the way for a cleaner environment, new jobs, new markets and investment opportunities, and a means to end our nation’s dependency on foreign oil, his efforts and policies have been vehemently criticized and opposed by the G.O.P. Solyndra’s case is a poignant example of the detrimental influence the current political climate has on the the renewable energy industry. The full implications of this trend in Washington are hard to predict, but they will certainly set US many steps behind in the global renewable energy race.



Solyndra’s bankruptcy case is made into a political issue and used against Obama in the 2012 presidential race

So why was Solyndra’s case made into a political scandal, in which Obama has been accused of wasteful, irresponsible spending of taxpayer’s money, that was allegedly used to help his cronies? Is there any truth to these allegations or are they all political propaganda cleverly manipulated by the Republicans in the presidential election race?



The reality is that the administration’s decisions in Solyndra’s case do seem to have political considerations, rather than pure economics in mind. As early as March of 2010, an independent audit by Price Waterhouse Coopers raised concerns whether Solyndra was financially viable. Similarly, internal administration emails reveal that administration staff and Obama’s allies in the venture capital world warned the White House that the company may not be a good investment.

However, despite these warning signs, Obama’s administration pressed on and administration officials pushed for the DOE to hasten its final decision on approving Solyndra’s loan just in time for Vice President Joe Biden to announce it on his planned trip to California. Obama also visited the company in a high-profile press event in May 2010, making an already troubled company an example of his successful energy and economic policy. Internal administration emails also reveal that to save face, the Energy Department convinced Solyndra to delay layoffs until after the 2010 midterm elections, according to those emails.

From private sources, the DOE was aware that the firm was in danger of bankruptcy, and in December 2010 Solyndra violated its federal loan deal terms by failing to make a payment on its loan. Despite this, the administration put in more effort and money into saving the company. In February 2011, the department restructured the loan, and found investors who provided Solyndra $75 million more in financing. One of the largest investors in Solyndra, who also backed this new loan, was George Kaiser (one of the biggest fundraising bundlers for Obama). Part of this deal was that private investors, would be paid back before the government if Solyndra collapsed.

So did Obama want to use Solyndra to help his own political agenda and public image in light of the upcoming election? It seems that the answer is YES. Was  it an economically misguided decision? YES. However, there is a lot of hypocrisy at play here: a renewable energy company’s ties to the administration are considered cronyism, but the fossil fuels companies’ ties to the G.O.P party and the previous Bush administration, which have afforded this industry lavish financial returns for decades pass with flying colors.

Understanding Solyndra’s case from the perspective of overall US energy policy

While Solyndra’s bankruptcy has been portrayed by most major media outlets as a political scandal, it is important to understand this case in light of the overall US energy policy. While the President has been accused of wasting taxpayers’ money during a recession, the reality is that the federal government actually spends a minimal amount on renewable energy, compared to other sectors. A 2009 American Energy Innovation Council Report states that the federal government spent only about $3 billion on energy research (which included help in commercializing the products for startup companies like Solyndra), compared with the lavish sums of $36.5 billion spent on the National Institutes of Health, and $77 billion spent on defense research. 

Moreover, taking a closer look at the Department of Energy’s 2005 Federal Loan Guarantees Program reveals that it backed close to $38 billion in loans for 40 projects around the country. Just a small fraction of these loans has been allocated to solar. In fact, the program’s largest beneficiary to date is an $8.33 billion loan guarantee for a nuclear plant in Georgia. Solyndra’s loan represents just 1.3 percent of the total program portfolio, but more significantly as of yet, it is the only loan that has soured.  Other solar beneficiaries, such as SunPower and First Solar, are still in business and doing well.

What is important to understand about this program is that it is specifically meant to allocate money to more than average risk startup companies, in which private investors would be too cautious to invest. This is the job that the government takes upon itself in propelling forward industries, such as renewable energy, that have a larger benefit to society than just financial profit. A job, that we as citizens need to be done.

What does it all mean? It means that while there may have been neglect and oversight on the part of the administration in analyzing Solyndra’s application for the loan, Obama’s administration can hardly be accused of cronyism and waste of money solely on the basis of one company’s failure. Numbers clearly show that this failure was an exception rather that a rule.



Politicizing Solyndra’s bankruptcy has potential to negatively affect the future growth and development of domestic renewable energy industry

 

Renewable energy industry in this country has a potential for growing and prospering only in the climate of stable government support. Federal policy not only directly aids the industry with financial incentives, but also signals to private investors that they can invest large amounts of capital into the industry. In previous years, US solar investments and support for the renewable energy industry in the US has been for the most part bipartisan, where both Republicans and Democrats saw renewable energy as being good for the country and for the environment in the long run. This mind set in Washington allowed President Obama to implement a number of important incentives programs such as the Production Tax Credit (PTC), the Investment Tax Credit (ITC) and others,  that have tremendously helped the growth of both solar and wind sectors of the renewable energy industry.

A number of these key incentives are due to expire both at the end of 2012 and in 2013. In the current political climate, where renewable energy has become a deeply divisive issue for Republicans and Democrats, it is highly unlikely that these will be renewed.  Solyndra’s scandal has really added fuel to the fire, further denigrating the worthiness of the entire renewables industry, both in the eyes of Washington’s policy makers and the general public. A telling comment by Rep. Cliff Stearns, who chairs the oversight subcommittee of the House Energy and Commerce Committee, sums it all up:” Solyndra’s downfall proves that green energy isn’t going to be the solution”  (Washington Post). How these sentiments will dictate our nation’s future energy policy remains to be seen.

Green Home Living in the 21st Century – Smart Homes

If you are into eco-friendly living, clean energy, and innovative green technologies, then chances are you have come across the term “smart house”, which has been popping up all over environmental and green lifestyle blogs. The concept of a smart house seems to not only be amazingly cool from the technological perspective, but it is also environmentally friendly and offers many unexpected benefits to homeowners in terms of comfort, health, and safety. It is inspiring that these technologies are developing at such lightning speed, which means that the day average consumers across the globe will be able to actually live in a smart house may be approaching much sooner than many of us expect.



Features and components that make a house “smart”

What makes a smart house unique is the fact that it is built as a place where technology and design go hand in hand. These homes are digital by design with a complex relationship between architecture, hardware and software. In building and designing a smart home, environmental considerations come first, and all technologies and materials have the purpose of making the house as green and energy efficient as possible. For example, to save energy, smart homes are designed to regulate energy use by running the washing machine at off peak times and switching off unneeded appliances.



One of the most visible, user friendly, and coolest features of smart houses is a highly advanced, interconnected and automated network of systems that can be manipulated both from inside the home or remotely. Some of the most common systems are Interconnected Personal Computing (any devise with a chip is connected to your PC, the home’s “command center”); Personalized Home Automation (comfort features such as lighting and window shades that can be adopted based on your and guests’ preferences), Security System and a Climate Control System. Keep in mind, that the architectural design of such a home also has to be smart, to be able to support all of the above mentioned systems and other green features.

Benefits of living in a smart home

While it may seem like these houses may be too techie and lab-like for the kind of cozy, comfortable living most people are used to, the opposite is actually true. The innovative high tech features add an unparalleled level of convenience, comfort and safety. While smart homes are designed to benefit people of all ages, older people or people with disabilities may be the biggest beneficiaries of the house’s high tech automated systems and features. The reality that we as a society need to be prepare for is that by 2050 the largest age group among women will be 80 plus. With the aging population on the rise in most Western countries including the US, smart houses may provide a revolutionary solution to the kind of in-home care most elderly and sick people with cognitive or physical limitations need, but currently do not have access to.

Dr. Diane Cook, a professor of electrical engineering and computer science at Washington State University, has been conducting research and testing various types of technology in sheltered accommodation for the elderly, which assists them with getting up, preparing food, making hands-free phone calls and remembering to take their medication. One of the biggest breakthroughs of smart home’s technologies is protection against safety hazards. This is a common affliction in people with disabilities, such as dementia, who cook and then forget to turn their stove off, causing a fire. In a smart home, sensors will turn the stove off automatically, when it is no longer in use. These types of features are also highly desirable for families with small children, offering an extra level of safety and protection within the home.



A smart home is a paradigm shift from what we typically understand a home’s function to be. An ideal smart home will as a whole think about your needs and will use its components, to meet them quickly and efficiently. Thanks to major advances in robotics, sensors and intelligent systems much of this technology is expected to be widely available within the next 10 years. We are living in exciting times when a smart home is quickly shifting from being a sci-fi fantasy into becoming a tangible reality that people can use and benefit from.

Benefits of Electric Vehicles (EV)

Are you tired of paying ridiculously high prices at the pump? Would it not be cool to do all of your daily driving without having to fill up at a gas station? Well, now this is becoming a reality for people who drive electric vehicles, also known as EVs.

What is an Electric Vehicle?

image of Tesla Model-S EV



Electric vehicles are propelled by an electric motor (or motors) powered by rechargeable battery packs. The batteries transfer energy to an electric motor, the motor turns the drive train, that turns the wheels. It is a highly efficient technology; up to 80% of the energy in the battery is transferred directly to power the car. Everything is computer controlled and a display shows you how the car is performing. The display lets you know about how much battery power you have left, and if you need to find a place to recharge, you can use the software built into the car or on your mobile device to guide you to the nearest charge point. When you are ready to charge your EV’s battery, instead of a gas tank there is a power cord, and instead of refueling, you recharge: just plug it in.

Benefits of electric vehicles

Electric vehicles are quickly gaining popularity and for a good reason. Besides helping our environment by keeping our air clean, they are also convenient, sleek and quiet, and for most of the short distance driving we do they are the perfect way to get from point A to point B, safely, reliably, and comfortably.

Consider the following advantages of EV’s over internal combustion engines (ICE’s)

1. Energy Efficient. Electric motors convert 75% of the chemical energy from the batteries to power the wheels. In comparison, internal combustion engines (ICEs) only convert 20% of the energy stored in gasoline.

2. Environmentally friendly. EVs emit no tailpipe pollutants, although the power plant producing the electricity may emit them. Moreover, electricity from nuclear-, hydro-, solar-, or wind-powered plants causes no air pollutants.

3. Reduce energy dependence. Electricity is a domestic energy source, and by using EV’s we are reducing our dependence on foreign oil as a nation.

4. Performance benefits. Electric motors provide quiet, smooth operation, stronger acceleration and require overall less maintenance than ICEs.

5. Tax Incentives. The US government is supporting a more widespread use of EV’s by providing special tax credits. Electric vehicles purchased in or after 2010 may be eligible for a federal income tax credit of up to $7,500. The credit amount will vary based on the capacity of the battery used to fuel the vehicle.



Disadvantages of electric vehicles

Some of the main drawbacks of EVs are battery related challenges outlined below. Yet, most of these issues can be resolved with a little extra planning on the part of the consumer.

1. Driving range. Most EVs can only go about 100–200 miles before recharging, where as gasoline vehicles can go over 300 miles before refueling. While this is an issue, taking a look at the statistics reveals a different perspective. As it turns out, more than 80% of Americans drive less than 40 miles round trip for their daily commute (US Department of Energy), which is just right for an EV.

2. Recharge time. Fully recharging the battery pack can take 4 to 8 hours. Even a “quick charge” to 80% capacity can take 30 min. This issue can be taken care of by recharging overnight, when you are done driving for the day, and electricity may be cheaper. However, for a quick charge during the day, charging stations are popping up everywhere in convenient locations across the US. Another option that is available on the market is an extended range EV: it starts by using battery power, but when the battery power runs low, gasoline fueled engine kicks in to power the electric motor, which in turn drives the wheels. So for shorter trips, you can rely on electricity, and still take longer road trips whenever you want. Anywhere you go, you can simply plug in or fill up.

3. Battery Cost and Weight Currently, the large battery packs are expensive and may need to be replaced one or more times. They are also heavy and take up considerable vehicle space. However, battery technology continues to advance, and researchers are working on improved battery technologies to increase driving range and decrease recharging time, weight, and cost.

Overall, with the speed of technological advancements in the car industry, it will not be long before electric vehicles will become totally compatible with internal combustion engine cars, while boasting major personal and environmental advantages. As Americans, we have had a long love affair with cars, often choosing power and speed over preserving our environment. However, as a society we have started to turn the page, as more of us make a conscious decision to opt for clean, comfortable electric vehicles.



Environmental Benefits of Eco-Friendly Clothing

image of Clothing manufacturing contributes to environmental pollution Do you know the real price tag of all the cool clothes you bought on that last blow out end-of season sale, in your favorite store? Whether we are trying to keep up with the ever-changing tide of what is fashionable, buying extra stuff because the bargain is too good to pass up, or because we love the GAP, Abercrombie, Diesel, etc, so much that we cannot resist just one more t-shirt or a pair of jeans, we just don’t stop to think twice before swiping that credit card.



While we are constantly bombarded with edgy advertising prompting us to buy more clothes that may never see the light of day after hitting our closet shelves, we rarely are aware of the increasing toll on the environment that our rampant clothing consumption is causing. From processing to manufacturing to distribution, big clothing manufacturers are causing water pollution, increase he amount of toxic waste dumped into the earth and atmosphere and overall contribute to global warming.

This will continue to happen as long as we continue to buy. Our dollars translate into corporate profit, and as long as large clothing corporations make profit, they will not change course. This means that as consumers we have the real power to help our environment by curbing our consumption and taking a stand by choosing to buy eco-friendly clothing, instead of the big brands.

Why are we not aware of the environmental damage caused by the clothing industry?

The answer is simple: for the most part pollution is not happening in the United States. Even not as far back as forty years ago, the US had a booming clothing industry, however as consumption demands soared, the increases in processing and production started to cause alarming environmental concerns in the areas where these factories were located. Water and air were polluted by harmful toxic wastes that were being dumped into them as part of the manufacturing process. The US has strict environmental laws that made it difficult for the clothing manufacturers to keep going at the same rate, so their solution was to move production off-shore to Asia and Latin America. Ever since the move happened, the clothing corporations have a had a field day with no enforceable environmental regulations, and a slew of other major benefits that the host countries provide. The result? They get the pollution, we get the pretty stuff, remaining blissfully unaware of what is really going on.



What is the harm to our Earth?

1. Processing of natural fibers such as cotton as well as synthetic fibers such as polyester in order to make them into fabric requires huge amounts of toxic chemicals, and excessive supplies of water. During this process the toxic wastes are dumped both into the land or into the water, making land unsuitable for agriculture and water for drinking.

2. Using up such huge supplies of water throughout all stages of clothing production contributes to water scarcity on our planet.

3. Dying clothes in all the bright colors that we love so much requires the most water and the most toxic, carcinogenic chemicals, all of which are also released into the land, water and air in the process.

4. The manufacturing process itself causes large emissions of CO2 into the atmosphere, contributing to global warming.

5. Oil is heavily utilized throughout, from processing to distribution, further polluting the environment and contributing to keeping the demand for oil high.

6. Every year, Americans dump more than 12 million tons of textiles. Less than 25% of this waste is recycled, which means the rest goes into our landfills.

Why eco-friendly clothing is the way to go?

Clothing production is a highly polluting process no matter how you slice it. However, eco-friendly clothing companies make a conscious effort to use environmentally safer practices in their production process. Eco-friendly clothing can take on many different forms. Many of the companies and designers in this niche are local, which means that your purchases will help support the growth of American artisan industry.There are companies that intentionally keep their production small, work with small cotton and silk farmers that use more traditional and environmentally friendly practices of textile production than the big manufacturers do, and in general find ways to cut down on the use of water and toxic chemicals. There are clothing designers that produce handmade clothing, thereby avoiding most of the pollution causing practices outlined above. Other clothing designers make up-cycled clothes, using recycled clothing and fabric. The truth is that as more people are becoming aware of the real environmental costs of buying big brands, they are slowly starting to make a switch to more environmentally friendly clothing. As a result, more options in eco-friendly fashion are becoming available to consumers. Do your research online and read about companies’ production practices to find the ones that show a commitment to our environment. If you look, you will be sure to find many options that fit your style, budget, and make you feel good that now your money is helping preserve our planet.