I am never one to shy away from an opinion, especially about something I know nothing about, such as solar energy. But I like many others are roasting Solyndra (the collapsed solar company) for failing. Failure is an integral, though unwanted, option of any new company’s future, ask any entrepreneur, ask any venture capitalist, ask any failed builder.
Side Bar: If a solar company collapses (like our own sun will someday) does it turn into a black hole sucking everything including light into itself? Just wondering, the congressional hearings kind of reminded me of that.
Fundamentally, solar energy is great. Without solar energy we and Pluto would have similar landscapes. It’s simple technology, whether gathering heat and making steam and then driving turbines and generators or through photovoltaic cells where the sun’s energy is directly converted into useable electricity. But like every other energy source, it’s expensive to produce on a scale that makes money. See: Chevron, PG&E, Exxon, and all those other evil empires we desperately need on a day to day basis. Overall the solar and wind industry produces less than 3% of the electricity used in the United States, and with the new finds in natural gas, pressures on the production cost per watt are enormous.
Whether the problem with Solyndra was technology, management or politics (I imagine a stew made up of all of them), the real problem was that it was not approached properly as a business (swampy ground here I know, but bear with me). In the Bay Area (San Francisco/San Jose) there are millions of empty square feet of manufacturing and office space. Solyndra was in a serviceable building before the loan pushed them to build more. Why did this company think it needed to build, from scratch, an incredibly expensive NEW building to produce these panels? Sure IBM and Apple can – but they earned their billions. Their bank is not the Bank of Uncle Sam.
Every start up knows that the most expensive part of growth is the employee; that’s why you manage your overhead; critical and important things like rent, utilities, and equipment. A new building for a questionable product with a marginal design (Solyndra’s tube array versus flat panel) and unknown market was asking for trouble. It found it.
There is a market for solar energy. Even though the industry supplies a small portion of the energy we use, it can easily produce over 50% of a home’s need. Solar panels are easy to install and becoming cheaper (yes China is to blame for some of that). The industry will push more and more into the mainstream. Someday, like certain code requirements for insulation, windows, and other energy saving building elements, solar may become mandatory, but not due to some governmental mandate or ordinance. It will happen, like heating in the first half of the Twentieth Century and air conditioning in the latter half, because it makes economic and personal sense. It’s best as a choice - not a requirement.
Rushing technologies with government pushing, will fail. At some point a better product will eclipse the old guard and again politics will try to save a failed government supported industry. You only have to look at affordable housing and mandated home loan requirements to get a sense of what can happen when the federal government plays venture capitalist.
Damning the solar industry (Lord knows I am not a big fan of government mandated anything such as high speed rail and electric cars) because of Solyndra’s failure is unfair. There will be successful solar companies and many will grow rich; good for them. But I, as always, do not like the government’s involvement, whether through guarantees, subsidies, tax write-offs, grants, or outright gifts. When these happen it is never about the product but about the politics.
Stay tuned . . . .
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