Government Investments in Renewables Significantly Lower than “Traditional” Energy Sources; Solar Company, Solyndra, Fails
Solyndra, the Fremont, Calif.-based thin-film manufacturer that received a $535 million loan guarantee from the U.S. Department of Energy (DOE) to ramp up to a 450-megawatt (MW) factory, declared bankruptcy in August of 2011.
With the downfall of Solyndra, doubt in American capability to compete globally in renewable energy development was a leading headline. However, according to the American Solar Energy Society “It’s not that Western manufacturers can’t make competitive, well-made products. The problem is that they can’t get competitive financing.”
The price for pure polysilicon, the raw material for Solyndra’s novel, thin-film solar panels, had dropped 85% from its competitive price of $250/pound four years ago. This significant drop in cost, by in large, has been attributed to China’s influence on the global market and their vigorous investments in solar manufacturing.
Since January 2010, Chinese banks have offered Chinese solar companies a staggering $40.7 billion. In comparison, solar manufacturers in the United States have received $1.4 billion in DOE loans since roughly the same time. This lack of front-end investment in the United States’ renewable energy industry is making global competition in many clean energy developments increasingly difficult. Read more on China and America investment in renewable energy and its impact on Solyndra at this American Solar Energy Society.
According to the 2011 report from the venture capital firm, DBL Investors, “[In the United States], all new energy industries – timber, coal, oil and gas, nuclear – have received substantial government support at a pivotal time in their early growth, creating millions of jobs and significant economic growth. Subsidies for these ‘traditional’ energy sources were many, many times what [the U.S.] is spending today on renewables.” According to the same report, “America’s support for energy innovation has helped drive U.S. growth for more than 200 years, yet government support for new energy sources is much lower today than it has been at any other point in U.S. history.” The DBL report on “traditional” and renewable energy subsidies can be read at this link.
Even with the bankruptcy of Solyndra, however, consumers are still showing strong support for investment in renewable energy research and development. In a bipartisan study conducted in Oct, 2011, “62 percent of U.S. residents favored investments in clean energy, while only 31 percent thought that such an investment was a waste of taxpayer money.” Read more results of the poll showing bipartisan support for clean energy investment.