The brewing scandal involving the solar panel industry may run much deeper than the failed Solyndra company.
New revelations suggest that the brewing scandal involving the solar panel industry may run much deeper than the failed Solyndra company. According to a report published by The Daily Caller, officials at at least four other solar companies that received billions in loan guarantees have donated large sums of money to prominent Democrats like President Obama, Majority Leader Harry Reid and Senator Barbara Boxer. In addition, tumbling stock prices suggest that some, if not all, of the companies in question may be heading for financial trouble.
Solyndra, the solar panel manufacturer based in Fremont, California that received $535 million in federal loans, was touted by the Obama administration as an example of the kind of cutting edge, green technology leader that America needs to invest in. The company subsequently declared bankruptcy and, when called upon to testify before a Congressional committee, Solyndra executives repeatedly invoked the 5th Amendment rather than answer questions about the fiasco. Now, it appears that the scandal is spreading. According to The Daily Caller’s John Rossomando:
Companies like First Solar, SolarReserve, SunPower Corporation and Abengoa SA have already, collectively, received billions in loans through Obama administration stimulus programs to build solar power plants in the southwestern United States. Yet each, with the exception of the privately held SolarReserve, has seen its stock price hammered at the same time it was lobbying the Obama administration and Congress for billions in loan guarantees.
For example, according to The Daily Caller, Oklahoma billionaire George Kaiser raised over $50,000 for President Obama in 2008. Kaiser has ties to both SolarReserve and Solyndra. Lee Bailey, a SolarReserve board member and U.S. Renewables Group investor, has donated $21,850 since 2008 to Democratic candidates, including President Obama, Senate Majority Leader Harry Reid and California Sen. Barbara Boxer. SolarReserve also paid more than $100,000 of lobbying fees to the Podesta Group. The Podesta Group is run by Tony Podesta, brother of Obama transition team head Leon Podesta. In the same vein, SunPower, spent almost $300,000 in lobbying fees with a close confidante of Harry Reid’s, as well as making hefty campaign donations to influential Democrats.
Meanwhile, the value of these companies appears to be dropping precipitously. The price of both SolarReserve and SunPower stock has dropped more than sixty per cent in just a few months, and Abengoa SA stock dropped over thirty five per cent in six months. (First Solar is privately held, so financial data is not available.) Nonetheless, not only have they received billions in federal loan guarantees, the Department of Energy just authorized a billion more.
The administration and “green energy” advocates tout solar as a vitally important source of green energy and claim that DOE seed money pouring into companies like these will pay off in the long run. There is certainly some demand for solar panels in the residential and commercial markets, but it’s hard to see how any US company will be able to compete with solar panels built in China given all of that nation’s manufacturing advantages in commodity markets. Solyndra tried to compete in that market and failed miserably, if predictably.
But, as dubious an investment in the residential and commercial market is, investment in the power market is even shakier. Solar power does not, will not and cannot play any significant role in electrical generation for a couple of very good reasons. First, the installed cost of a solar plant is more than double that of an equivalently-sized coal plant, and more than ten times the cost of a gas turbine plant. And then, because the sun doesn’t shine all of the time, solar plants spend most of their time not running. The metric used to determine availability is called the "capacity factor." This is a measure of how much power a plant actually produces, as compared to the amount of power the plant could produce if it were running at peak capacity every hour of the year. A typical nuclear plant runs at an annual capacity factor of around ninety percent. Coal plants usually operate in the sixty to seventy-five percent range. Most solar plants operate at capacity factors of less than twenty five percent.
There’s no free market incentive to build power plants that are much more expensive to build and operate far less than other technologies. Without the grants, loans, subsidies and tax breaks, no one would choose to use solar energy to enter the power market. Yet, that is the very market that First Solar, SolarReserve, SunPower Corporation and Abengoa SA are going after, and Obama’s Department of Energy is pouring billions and billions into the companies to make it possible.
To provide a little perspective on just how paltry a contribution solar power makes to electric generation, consider that the entire United States’ electric generation fleet totals a little over 1.1 million megawatts of capacity. Of this, about 640 megawatts, or 0.05%, is currently solar. Over the next five years, the Department of Energy projects that over 75,000 megawatts of new capacity of all sorts will come on line, a figure that includes 2,883 megawatts of solar power. That will move solar’s potential contribution up to a whopping 0.3% of the total.
Solar power combines enormous construction costs and pitiful reliability in a way that no other power source does, and the numbers reflect that simple truth. The fact is that solar power can do virtually nothing to replace reliable fossil and nuclear plants. The only thing that solar power has been able to achieve is to separate taxpayers from billions of their hard-earned dollars. As the Solargate scandal spreads, more and more Americans are wondering why that has been allowed to happen.