Solyndra and the Scandal of Tomorrowland
[Posted by Karl]
Megan McArdle, explaining why the federal loan guarantee to the now-bankrupt solar company Solyndra is more venture socialism than venture capitalism, concluded:
[T]his isn’t much like a VC. Or anything else that makes financial sense in the private sector. It’s like… the government giving money to companies that sound whizzy.
Instapundit Glenn Reynolds added: “A more cynical explanation is that the ‘sound whizzy’ is just meant to be a distraction from what’s really no more than a payoff to political supporters.” When the history of the Solydra debacle is fully written, Prof. Reynolds may well be correct about the political payoff angle. However, our sprawling federal government offer myriad opportunities for political payoffs, so it’s worth examining why the Obama administration would throw hundreds of millions of taxpayers’ dollars at things that “sound whizzy.” To invoke a Beltway cliche, a scandal may be what is legal more than what is illegal. The Solyndra case sheds light on the larger Scandal of Tomorrowland.
Before Solyndra went bust, solar industry leaders would frankly admit to friendly media that “the growth of their US operations is vitally dependent upon a fragile matrix of government support — state renewable portfolio standards and federal tax credits, grants and construction loan guarantees.” (There are echoes of Obamacare here, with government mandates and government subsidies propping up a Potemkin marketplace.) There are at least three major reasons solar fails as a feasible alternate energy source — diffuseness, cost and unreliability — and little progress has been made in addressing them. For example, regarding diffuseness, environmentalists have already opposed efforts to build large solar plants in the Mojave desert. On the issue of cost:
Energy Secretary Steven Chu says that the billions of dollars in federal stimulus money directed toward solar-power will cut solar power costs in half by 2015. It’s a grand sounding prediction, but his own Energy Information Agency projects that electricity from solar cells will cost nearly five times as much as electricity from natural-gas-fired power plants. And that’s without any adjustment for the unreliable nature of solar power or for the additional transmission costs.
On the issue of reliability, if you pore over the International Energy Agency’s “roadmap” for photovoltaic solar energy (.pdf), looking behind the grandiose predictions, you will find much more diktat than detail, with storage and transmission issues punted to “emerging” technologies. People used to the lights going on when they flip the switch and not freezing to death during long winter nights will come away unimpressed.
In short, the solar outlook is not sunny, which is why lefties like Ezra Klein and Dave Johnsen are reduced to defending the energy welfare state with assertions like: “If our success rate is too high, it means government is making bad investments,” and “the purpose of our government’s involvement in this is to help trigger an ecosystem around which a green-energy industry can grow.” Pouring money we don’t have down a rat hole only triggers an ecosystem for rats, which would tend to bolster the Instapundit’s point. And yet, I still think there is more to it than that.
Part of it is the left’s belief in the coming global warming apocalypse. It is a crisis the left does not want to go to waste, given the massive statism that would be involved in forcing the world off fossil fuels by federal fiat. The most feasible alt-energy remains nuclear, but American greens are bitterly divided on nuclear power, leaving them with solar and wind (which should embarrass on both counts those claiming to be the Party of Science). The hardest of hardcore greens will admit they want humanity to make do with less; the rest dress up this political poison in fuzzy notions of “sustainability.” Pretending that solar and wind are the near-future allows progressives to avoid the appearance of luddism and pose as leaning forward, rather than the movement of 20th century nostalgia they really are. It is not unlike the way Walt Disney’s original vision of Tomorrowland in his theme parks has morphed into a quaint retro-futurism that never was and never will be. That is the larger scandal behind giving money to companies that sound whizzy.
–Karl
http://www.americanthinker.com/2011/10/science_lies_and_videotape.html
ian cormac (ed5f69) — 10/2/2011 @ 4:21 amTo Liberals, failure is a reason to double down before even understanding why …
My Bowels Hurt (8d652e) — 10/2/2011 @ 5:46 amIf the environmentalists continue to follow a pattern I have observed since the early 1970’s, as Wind and Solar power systems get closer to actually being built on a scale that could generate large quantities of electricity, the environmental lobby will be increasingly disenchanted with them. For as long as I’ve been paying attention to politics, “Alternative Energy” has meant systems of electrical generation that are in no danger of actually producing serious quantities of electricity.
C. S. P. Schofield (b8ee74) — 10/2/2011 @ 6:49 amWell written Karl; it about sums it up.
I am perplexed, though, over this quote that you include:
“If our success rate is too high, it means government is making bad investments,”
Just WTF does the writer mean by that?
Plus, SCPS is onto something in his comment, in partially ripping back that curtain that camoflages the enviros belief system.
I believe that they are just another subset of the general “elite” that creates an issue which allows them to feel superior to the “unwashed” over; and, once technology begins to catch up to their “dream”, they move the goal-posts once again to maintain their superiority to the masses.
As with all “elites” it is never about what they profess to believe in, it is just about them.
Another Drew - Restore the Republic / Obama Sucks! (26b465) — 10/2/2011 @ 7:22 amAnother point:
I would point you towards a column in the weekend edition of the WSJ-online, where Stephen Moore talks to Harold Hamm, CEO of Continental Resources, and the wildcatter who discovered/proved the Bakken Fields of Montana and North Dakota…
http://online.wsj.com/article/SB10001424052970204226204576602524023932438.html?mod=WSJ_Opinion_LEADTop
…and Mr. Hamm’s comments about the Obama Administration.
There are two players in this scandal that need to be strung-up:
Steven Chu for wasting our money; and,
Ken Salazar for putting the brakes on development and exploitation of carbon-based energy resources on Federal Lands.
Only by restricting the availability of carbon-based energy resources, thereby raising the price in the market-place, can any of these “alternative” pipe-dreams have any chance of success.
So Ken, a Man of the West, under the rubric of “protecting our inheiritance”, shuts down the energy industry so that the favored few (read: political cronies/supporters of The President) can feed at the Federal Trough of OPM under the cover of “advancement”.
As has been said by many others, the true scandals in DC are not doing something that is illegal, but doing something that is not illegal.
Another Drew - Restore the Republic / Obama Sucks! (26b465) — 10/2/2011 @ 7:47 amEarlier in the Obama Administration, I learned the basic rule of the media:
Republican wars are bad; Democrat wars are good.
Now it is clear that the media rule can be applied here:
Republican corruption is bad; Democrat corruption is good.
AZ Bob (f67ff0) — 10/2/2011 @ 7:56 amCorruption and cronyism is running rampant in our government, and this is just the tip of the iceberg.
Consider this recent case in Texas where the judge appointed a “trustee” over a Dallas business owner. The business owner was involved in a civil dispute and paid millions of dollars to lawyers, and when he objected to their fees, they had a “friendly” judge seize all of his property, without any notice or hearing, and essentially ordered him to be an involuntary servant to the lawyers. The business owner has been under this “servant” order for 10 months and is prohibited from owning any possessions, prohibited from working, etc…
http://www.lawinjustice.com has details about this disturbing case.
Steven (412f6b) — 10/2/2011 @ 8:03 amAD/RtROS (4)
Klein’s argument is that the feds aren’t acting like venture capitalists here, but gamblers on high-risk high-reward projects. Thus we should expect many more failures, because we’re looking for those one or two projects that pay off against all odds and transform the world.
The argument fails on many levels, not the least of which is that it would be arguable (if at all) in the context of basic R&D, which Solyndra was not.
Karl (37b303) — 10/2/2011 @ 8:05 amOh here’s another one:
Bush deficit bad; Obama spending good.
AZ Bob (f67ff0) — 10/2/2011 @ 8:10 amEarlier this year while driving south through Indiana toward West Lafayette we were astounded at how much tillable cropland had been re- purposed to wind farms just since the last trip. Miles and miles and miles of them. Considering all the arguments against using harvested corn for ethanol instead of for food (arguments I largely agree with) the idea of removing cropland of that kind from production entirely–and not using it to raise a crop of any kind– is hard to understand on any rational level.
It’s easy to blame “greedy” farmers for taking the windmill money. But it’s naive to do so. They didn’t start the movement. Who did? Take a look into the longer past of ethanol production development. It reveals similar green actors and investors who were against more drilling and said they wanted to “reduce our reliance on foreign oil with alternative fuel which was renewable”. Sounds noble, no? Never overlook that many of the the same interests who once pushed ethanol subsidies to grow that industry, are now pushing subsidies to “help along” the solar and wind industries. Hmmm.
I suppose when the wind industry falls completely from favor and the windmills crumble, the cropland can be returned to production. But after a couple decades of losing nutrients and also the benefits of plowed-under inputs from crops, it will no doubt take a long while for the land to return to its former productivity so it can feed the world.
elissa (1af4da) — 10/2/2011 @ 8:15 am“It’s easy to blame “greedy” farmers for taking the windmill money. But it’s naive to do so. They didn’t start the movement. Who did? Take a look into the longer past of ethanol production development.”
elissa – I was modeling project financings for ethanol and wind farms on Wall Street in the early 1980s, with both heavily dependent on subsidies. Nothing has changed in 30 years. The idea that these alternative energy sources will become competitive with nuclear or carbon based energy sources is a complete fiction.
daleyrocks (bf33e9) — 10/2/2011 @ 8:34 ambillions here and there
ColonelHaiku (a4b693) — 10/2/2011 @ 8:36 ampretty soon talk real money
where when will it end?
Alternative energy electricity generation = Lose a lot on every megawatt but make it up in the next millennium?
daleyrocks (bf33e9) — 10/2/2011 @ 8:38 amSpeaking of energy, here’s some energy the morons at the Washington Post are expending in a transparent attempt to kneecap Rick Perry:
http://www.washingtonpost.com/national/rick-perry-familys-hunting-camp-still-known-to-many-by-old-racially-charged-name/2011/10/01/gIQAOhY5DL_story.html
ColonelHaiku (a4b693) — 10/2/2011 @ 8:41 amNow that we know Klein understands what it’s like to drill oil wells for a living, surely he’ll be a big supporter of tax breaks for oil companies. Right?
DRJ (a83b8b) — 10/2/2011 @ 8:56 am==Klein’s argument is that the feds aren’t acting like venture capitalists here, but gamblers on high-risk high-reward projects==
DRJ– Ah, I lurves it when the feds “gamble” with my money. It’s the exact same foregone end result as when I gamble myself–but I didn’t even have a nice meal in Vegas or get to see Celine Dion.
elissa (1af4da) — 10/2/2011 @ 9:13 amKlein’s argument just proves the economic illiteracy of the Journolist-class.
elissa, just why can’t these farmers do both.
Another Drew - Restore the Republic / Obama Sucks! (26b465) — 10/2/2011 @ 9:24 amHere in SoCal, one of the last redoubts of agriculture in this vast urban wasteland are the strips of land under long-distance, high-tension, power-lines.
Edison(sic) leases these strips out to ag operations for various growing operations:
flowers, tomatos, strawberries, etc.
There seems to be no reason why you can’t grow corn/soybeans under towering windmills.
But, elissa, though you didn’t get tickets to Celine, or a comped meal;
you did get a “tingle” up your leg listening to The Lightworker, didn’t you?
______________________________________________
Energy Secretary Steven Chu
That’s the guy who’d like to see the per-gallon price of gasoline soar to the levels they’re at in Europe, undoubtedly through the means of ratcheting up taxes, if not solely at the discretion of OPEC. I could almost tolerate his opinion if it were predicated on the need for the US to become more energy dependent. But, no, it’s mainly because he’s a greenie who thinks carbon dioxide is a threat to earth.
In short, the solar outlook is not sunny
When I first learned about a study of the failure of government-supported solar-energy projects in Spain (with its current Socialist-run government), I admit to not being 100% sure if it necessarily applied to (and could be a lesson for, or forewarning to) a country like the US, with its larger economy and more capitalistic traditions. Stories like Solyndra have pretty much removed any doubt I originally had.
This is another article, published 2 years ago, that also was a forewarning:
^ Another capper to such stories are the variety of Greenie liberals (aka “limousine liberals”) residing in coastal areas of the Northeast who’ve protested the development of wind turbines around the ocean, because of the way that will impact the scenery.
Liberals: can’t live with them, can’t live without ’em.
Mark (411533) — 10/2/2011 @ 9:25 amBut, but you don’t understand, if we throw enough money at it, it will eventually work and change the world. Just like any government program, the reason why it hasn’t worked is because we didn’t put enough money into the program. You know if we put even more money in the stimulus, it would have worked. Education would get better if it had more funds, healthcare will work if the government takes it over and puts massive amounts of money into it, … If it doesn’t work it’s because it needs more money.
Whew, it’s to hard to ignore common sense and think like a liberal.
Tanny O'Haley (12193c) — 10/2/2011 @ 9:35 amMy company claims to generate lots of solar via rooftop panels on one of the plants, to the point where it’s over 25% of their power usage and they have to sell it back to the grid. I don’t know the details, but given the weather over there, I was really skeptical. I imagine there are subsidies galore to make them cover the entire roof like that.
Gov. Rick Perry (49ef9f) — 10/2/2011 @ 9:36 amMy above comment refers to a building in Germany.
Gov. Rick Perry (49ef9f) — 10/2/2011 @ 9:36 amAnd based on the above two, I have to stop doing the sockpuppet Friday thing.
carlitos (49ef9f) — 10/2/2011 @ 9:39 am==There seems to be no reason why you can’t grow corn/soybeans under towering windmills==
AD–I can’t tell if you’re kidding or not. If you’ve seen a combine, or a 12 row planter or a tractor pulling a plough you know that such massive machinery cannot maneuver between rows and around the bases of windmills like performance cars on an obstacle course.
elissa (1af4da) — 10/2/2011 @ 9:47 amtilting at windmills
ColonelHaiku (a4b693) — 10/2/2011 @ 10:09 ambask in the power of Sun
Hallow’s on the Ween
Racist science-deniers
JD (ac417f) — 10/2/2011 @ 10:20 amOne should take care to separate Solyndra from solar in general. Their product was a bad idea, badly done and they could not make a go of it because other solar products were better and cheaper, not because solar itself wasn’t economical. The marginal cost of solar electricity at the industrial level is lower than most, especially when considering that solar production coincides with peak usage. Payback of a large plant can be a little as 4 years.
Just not with Solyndra panels which costs 3-5 times what more efficient conventional panels cost.
Kevin M (563f77) — 10/2/2011 @ 10:29 amI have seen both, and farmers are – if nothing else – inventive. Who knows, some of them might even have been in the Marine Corps, where they were taught to “adapt, innovate, overcome!”
The bigger, and more efficient the windmill, the greater is the sweep of the blades, and the higher off the ground the hub is.
Another Drew - Restore the Republic / Obama Sucks! (26b465) — 10/2/2011 @ 10:33 amThese things are not sited hip-to-hip, there has to be some spacing or you get vortex interference which decreases the effective wind-pressure/flow across the arc of the blades, and they have a tendency to “stall” (think of one plane following too closely behind another – several bad crashes caused by “vortex stall” in aviation history, such as the top execs of In-and-Out Burgers attempting to land at John Wayne in OC in a corp-jet.
I’ve been through Altamont Pass, and Banning Pass, numerous times. I know what windmill farms look like.
It might not be the most efficient form of corn/soybean farming, but it can be done, and wring out further utilization of a resource that’s just going to waste. Or, perhaps they could really innovate, and plant some alternative crop? I hear that peanuts are very good for soil rejuvination – some guy down South figured that out a hundred years ago or so.
Or, here’s a thought, they could plant switch-grass, and sell the cuttings for conversion to cellulosic-ethanol. It doesn’t even need to be watered as it’s a wild grass, and goes dormant over the winter. Just cut it in the fall, and watch it grow again in the spring.
Of course, the only reason that these farmers have the luxury of leaving this ground fallow under their “wind farm” is that the govt is subsidizing them for the installation of the equipment, and guaranteeing a market for their electricity (probably at a very good price to them – or subsidizing the cost to the purchaser of said power).
Another Drew - Restore the Republic / Obama Sucks! (26b465) — 10/2/2011 @ 10:39 amEliminate the subsidies for ethanol, and other forms of “green” energy, and force them to compete in the real market place, and this House of Cards comes crashing down.
Just how long will ADM and the others be involved in ethanol sans subsidy. Yeah, I can’t express that time gap except in nano-seconds either.
Same with wind, solar, thermal, you name it.
The govt has distorted the market, and we all know from the CRA/Fannie-Freddie caper what happens when govt distorts markets.
Kevin M (25),
Solyndra was a particularly egregious boondoggle, but if the rest of what you wrote was even remotely near reality, the solar industry would not be dependent on government mandates, subsidies and loan guarantees — and would already constitute a major source of electricity in the US.
Had you read the underlying links in the post, you would also know why the average production is more important than peak production.
Karl (37b303) — 10/2/2011 @ 11:08 amAD and others–
Sorry if this windfarm discussion is getting too far afield (heh) of the thread topic, Solyndra. I’m not an expert on windfarms other than I know I don’t like what they’re doing to the Midwest farming milieu and ultimately to the price of food. A good friend in the re-insurance business is an expert, however, so I’ve picked up a bit knowledge about it there. The whole situation may be different in Cali (most things seem to be–again, heh) but around here the land is long term leased from the farmer by such companies as Horizon Energy. The farmer has nothing to do with the build or the energy production, and usually (as I understand it) for liability reasons he cannot use or benefit from the land he owns under the windmills and the transmission lines– other than collect the substantial lease money. As has been pointed out, none of this would be happening without government subsidies and incentives to the wind energy corporations– and laws that prod. The government subsidies do not go direct to farmers.
This article from 2008 from an alternate energy website with an alternate energy POV is about the specific windfarm I referenced initially on this thread.
Indiana wind farms will be the largest of the Horizon’s farms and the proposed site will be at Meadow Lake in White County. The company will install up to 660 turbines spread over 100,000 acres.
Indiana’s wind pales in comparison to that of West Texas, where huge farms are under construction. So why is Horizon Wind Energy investing so much money here? They are of the opinion that they can transfer energy to the users easily and here the energy doesn’t have to travel far. They can offset the disadvantage of the moderate wind resource by having the wind farms closer to the users. Horizon has made determined efforts for the last few years to secure 50-year leases for its wind farms. They are quite hopeful to have the first phase running by next year.
The presence of all the new turbines will change the landscape, but residents are not complaining. Farmers typically earn $4,000 to $8,000 per turbine per year, revenue that also adds to local tax coffers. But farmers won’t be able to use the electricity generated on their own farms. They have to put up their own windmills. As an independent power manufacturer, Horizon can’t distribute straightforwardly to customers. Instead, it sells to utilities.
http://www.alternative-energy-news.info/horizon-wind-energy-indiana/
elissa (1af4da) — 10/2/2011 @ 11:42 amSort of Off Topic/On Topic
One alternative energy source that works for semi-rural folk is using ground temperature. Series of pipes go down into the ground where the temperature is a steady 50-60 or whatever. In summer hot air goes down, comes up cool. In winter, cold air goes down, gets warmed up (some) and decreases the amount of energy needed to keep it comfortable. I don’t know how big a system is necessary to make it work,how small a system would still be worthwhile. I wonder if pipes under the basement foundation would be better than nothing.
No, I don’t know how long it will take to affect the earth’s permafrost or core temperature. I think we could capture a sampling of moles around the world and attach transmitters and temperature sensors to monitor the situation.
MD in Philly (3d3f72) — 10/2/2011 @ 11:49 amMD in Philly,
George W. Bush has a a geothermal system at his ranch house in Crawford. I think it’s expensive. Where I live, it would be very expensive because the subsurface is so hard to drill through.
DRJ (a83b8b) — 10/2/2011 @ 12:23 pmBut “expensive” is relative. I bet the energy savings over time make it pay off.
DRJ (a83b8b) — 10/2/2011 @ 12:27 pmPLASTIC explosives…
EricPWJohnson (5b6769) — 10/2/2011 @ 12:41 pmComment by Another Drew – Restore the Republic / Obama Sucks! — 10/2/2011 @ 7:47 am
As has been said by many others, the true scandals in DC are not doing something that is illegal, but doing something that is not illegal.
Or: The real scandal is not what’s illegal – it’s what’s legal”
This seems to be attributed to Michael Kingsley, who said that many times on Crossfire, according to the Wikipedia article about him, and otherwise to John Bogle, who started maybe the first index fund, but I think it was the late Jack Newfield, a writer for the Village Voice (and later the Daily News and New York Post) who used to say that, talking about New York State, sometime before 1988.
Sammy Finkelman (9ab1e5) — 10/2/2011 @ 12:43 pmKarl–
Retail home solar without any subsidy or economy of scale costs as little as $5/watt installed. I have had it quoted for that myself. (The highest quote I got was under $7/watt)
At $5/watt it takes about 15 years to break even at LA DWP prices (currently 15 cents/KWhr including taxes). This is ignoring the fact that LA DWP prices will increase faster than any current interest rate over those 15 years.
Now, commercial or industrial plants DO have economies of scale, and those 15 years collapse down quite a bit. Truly huge solar installations are being quoted under $1/watt, probably in some of the stories you linked to; I’ve seen that quoted for the other (non-Solyndra) DOE-backed projects in the last week.
The solar industry isn’t particularly dependent on government handouts for large-scale projects. However, since government has great ability to kill any industrial project (e.g. endangered species, rabid environmentalists, competing provider’s lobbyists, etc), these projects can be iffy. It is impossible to make large industrial investments in ANY filed today without insuring against governmental action. Nuclear power has the same issues, except more so. So they ask for government loan guarantees on a PROJECT basis as a way of insulating investors from arbitrary government actions.
Is this a good thing. No. Hardly. It is patching a bad system, instead of getting rid of EPA and such rot as they should. But investors don’t live in the rarified world of what-ought-to-be and they need some assurance that some ass*ole at the State Bureau of FUBAR Notions won’t screw them over a lizard or something.
And NONE of that relates to the Solyndra loan guarantee, which (as Megan McArdle points out wasn’t even a good use of loan guarantees)
Solar panels are cost effective for large industry today, especially if you have spare flat rooftops to put it on. Given subsidies, which exist even if a bad idea, even home solar drops to about $2.50/watt, with a payback of less than 8 years (again ignoring both interest and energy inflation).
The problem isn’t solar, it is crooked politicians that are finding this, too, is a graft opportunity.
Note: solar calculations:
Watts AC = Watts DC (as typically quoted) * 0.85 (system efficiency) — DWP subsidy is based on Watts AC
Kevin M (563f77) — 10/2/2011 @ 1:18 pmKWhr produced/year = Watts AC * 5.5Whr/day (daily average factor SoCal) * 365day/year * 10^-3KW/W
Energy value = KWHr * $0.15 (including all taxes and surcharges)
Karl,
By peak production I am referring to the fact that solar energy is produced during times of peak electricity demand (i.e. afternoons). I was not referring to peak panel output, which is just a number to use in computing the averages. I am told that, given south-facing panels, the factor is 5.5KWhr/day for each AC KW of peak system production,
Kevin M (563f77) — 10/2/2011 @ 1:32 pmDims in panic mode
ColonelHaiku (a4b693) — 10/2/2011 @ 1:35 pmsave us obi-wan clinton!
you’re our only hope
Solyndra claimed to increase this factor to 6-7KWhr/day. Only problem is that their panels cost 3 times as much to produce, making it uneconomical in the extreme.
Kevin M (563f77) — 10/2/2011 @ 1:36 pmOf court it’s just political payola! If energy conservation or AGW were truly crises, the government would be giving us solar panels, wouldn’t they?
Patricia (1832e5) — 10/2/2011 @ 1:38 pmWhere I live, it would be very expensive because the subsurface is so hard to drill through.
PLASTIC explosives…
Comment by EricPeeWeeJohnson
not nearly as hard as your melon, I’d wager.
ColonelHaiku (a4b693) — 10/2/2011 @ 1:39 pmThe problem with these subsidies is that the people in power do not have the knowledge to judge either the business plan or the state of the technology.
If it sounds cool and exotic, and the promoters know how to work the levers of govt and private foundations, then the money flows.
Doesn’t mean the product is actually viable.
jeanne (3b8260) — 10/2/2011 @ 1:56 pmKevin M,
Read the Scientific American piece linked in the main post, as it appears that you have not. The entire industry is propped up by various forms of govt mandates and subsidies. It’s major players in the solar industry saying it to friendly media. I quoted the piece, but here’s another quote: “[T]he reality is that solar power producers still cannot compete with conventional electricity generators without state and federal help, particularly in a U.S. energy market dominated by the availability of cheap natural gas.” That’s stated as fact in a piece by Climatewire, for Chrissakes (a piece which, incidentally, vastly undersold the problems at Solyndra). Your claims that solar is cost-effective seems to blithely ignore all of the market distortions underlying your price quotes.
Also, read the bit by Steven den Beste (chizumatic) on feasibility. Then consider the solar industry’s big claim is that they may soon be closing in on 2/3 of 1% of US electrical demand. That’s, er, underwhelming.
You can try to sell the notion that “solar needs protection because govt can mess with anyone argument” all day long, but propping up solar at the expense of the public (heck, propping it up at the expense of far more feasible nuclear power) is not the answer (especially where, as linked, greens will obstruct large solar installations anyway, as they are doing in the Mojave). Your argument is an argument for pervasive government interference in the market, because as long as the government is inrefereing in this way over here, it must be justified to interfere in that way over there. No sale.
Karl (37b303) — 10/2/2011 @ 2:00 pmI read a little about Solyndra but not nearly enough, and nothing basic or detailed enough, but filling in some blanks, the situation seems to be somewhat like this:
What Solyndra had was a patent. I don’t know that they actually had a patent, but having a patent would make this make a little sense.
Their idea was they would make solar panels that were:
1) Easier – and that means cheaper – to install
and
2) That used somewhat less silicon (which was very expensive then, but the price fell to less than 20% of what it was before)
The math probably never added up. The promoters may have been hoping for greater tax credits than already existed in law or something.
Having a patent, and people not really understanding the business, in that the real competition was not the power grid, but other possible kinds of solar panels and solar power, was what enabled them to attract some investors. There are always enough uninformed rich people. People invest in out and out Ponzi schemes. People invest in Broadway plays, where the odds of success are very small..
Then they went after government money. Now, there are two possible problems with federal loan guarantees:
One is, if it’s a good idea, the return on investment may be much higher than it otherwise would be, since they could borrow more and there are fewer shareholders – but nothing will really happen any faster. All that that guaranteed loan did was make investor’s profits higher.
Two is, if it’s bad idea, the government loses money.
Anyway, the loan they got was to some degree subsidizing operating losses. Another thing it was used for was to build a new, bigger factory they didn’t need. But the idea of a new factory did appeal to people close to Obama who wanted to show the government creating jobs. In September 2009, when the loan guarantee was finalized, construction started. It was the first factory built in Silicon Valley in many years.
The reason no other factories had been built there was because land was very expensive, but here I guess the idea was to make good video. A cartoon come to life. In cases like that, who cares where you are putting the factory?? If anything, it stands out more if it is all alone.
They weren’t selling half the output of the old factory. Nobody asked about how fast business would expand and if it did if there wouldn’t be enough time later to build a factory then.
The factory was not only very green, with four electric car charging stations in the parking lot, it was also very very modern, with “robots” that whistled tunes from Disney while they carried panels from one place to another in the plant (to alert humans it was said because they really resembled nothing so much as freezers on wheels) and top class showers for the human workers. And it was BIG.
“The new building is like the Taj Mahal,” said John Pierce, 54, a San Jose resident who worked as a facilities manager at Solyndra.
http://www.mercurynews.com/business/ci_19015472?source=rss
At first, the work was split between the old and the new factory. After a decent interval had passed since the opening of the new factory, the old factory was closed.
Anyway back during the Bush Administration, people who had worked in venture capital were hired to evaluate projects. When the Obama Administration came in, they wanted to push things through.
This was partly because of Keynesian economic thinking. The basic idea really was to rush money out the door as fast as possible on the grounds it would help the economy, but if it could also accomplish something useful, that would be a thing of beauty. One of the few ideas the Obama people really liked was “green energy”
But most important was to get money out the door somewhere. The people in charge of evaluating projects simply couldn’t work fast enough for their political bosses. They didn’t have enough information to say this was a good investment or a less risky loan. It was basically forced ahead.
About two years later, in February 2011, the company was heading toward bankruptcy. The people who had approved this – higher ups – didn’t want to see this fail.
So they came up with a form of creative financing. Solyndra would get new investors, but the old federal loan would be subordinated to ..I’m not sure what. Stockholders? It sounds like that.
Subordinating the loan was however illegal. Black letter law. But nobody noticed. Or it could be that the Republicans are wrong about this and that clause only applied at the time of the original loan, but if you believed that the best way to safeguard the federal government’s interest was to allow something to be preferred, you could do that. (It is argued a complete factory would be better than an uncompleted one, and they also got the intellectual property as additional collateral.)
Here’s a bit on this with some links:
http://blogs.reuters.com/muniland/2011/09/23/solyndras-funny-money-flow/
There seem to be any number of attempts to improve and simplify the story, and this must be resisted. And they may all the while while doing this, possibly be overlooking where things really went wrong.
http://digg.com/news/politics/the_administrations_decision_to_subordinate_debt_owed_by_solyndra
Which I guess means that’s what illegal maybe does count. There also may have been outright fraud (imaginary or made up order backlogs and things like that)
Sammy Finkelman (9ab1e5) — 10/2/2011 @ 2:12 pm_______________________________________________
These to me are among the most revealing quotes of this debacle:
Mark (411533) — 10/2/2011 @ 2:27 pmWest Texas wind-farms v. Indiana wing-farms:
Yes, the transmission costs could be less, but any new transmission lines will generate enviro lawsuits, as they have done in the West (not just in TX). It would amaze me that the enviros haven’t already filed suit over the deaths of birds (Migratory Bird Act violation). They attempted to shut down a ND oil field over the death of one bird in a “mud pool”, why wouldn’t they try to shut down wind-farms over the deaths of hundreds/thousands?
Another Drew - Restore the Republic / Obama Sucks! (26b465) — 10/2/2011 @ 2:28 pmAlso, T.Boone Pickens, who was promoting wind-energy generated from West TX wind-farms ran into this enviro buzz-saw over both bird deaths and transmission lines – I think he’s had an epipheny, or maybe it’s because his investors have had some serious second-thoughts.
“Indiana WIND-farms”
Another Drew - Restore the Republic / Obama Sucks! (26b465) — 10/2/2011 @ 2:29 pmScuttled New York windfarm project a billion dollar boondoggle. Oh good grief.
It was pretty clear all along that building a wind farm in the waters of Lake Erie or Lake Ontario would be way too expensive.
What we didn’t know until last week was that it wouldn’t just be way too expensive: It would have been a boondoggle of epic proportions. When the New York Power Authority formally pulled the plug Tuesday on the offshore wind farm project, NYPA officials said it wasn’t “fiscally prudent” because even a 150-megawatt project – on the small side of the agency’s guidelines–would require subsidies of $60 million to $100 million a year.
But the subsidy wouldn’t have just lasted for a year or two. NYPA would have paid them for 20 years. So on even a small-scale project, it would have cost $1.2 billion to $2 billion in subsidies over 20 years just to make the project work financially.
…
Power Authority trustees, wanting to put a positive spin on the demise of the Great Lakes venture, took pains to note that, as the upstate project dies, it is launching a new push for a big wind farm off the Long Island shore, where the demand for electricity is greater. Anderson said the subsidies for that project could be less because the market price for electricity is higher downstate
http://www.buffalonews.com/business/business-columns/david-robinson/article578917.ece
elissa (1af4da) — 10/2/2011 @ 4:22 pmThe tragedy elissa, is that all of this wind-power dreaming denies the reality that is right under their feet:
Another Drew - Restore the Republic / Obama Sucks! (26b465) — 10/2/2011 @ 4:36 pmThe vast expanse of natural gas available in the Marcellus Shale Natural Gas Field Formation, which extends through Pennsylvania, New York, Ohio, and West Virginia.
But, as always, the enviros bring up one objection after another to tie-up the exploitation of this vast resource, objections that which, when examined, reveal the anti-science bias that permeats the environmental movement.
Steve Hayes has a great point in his Solyndra article in the latest copy of the Weekly Standard. Its not online yet or I would link it, but he has an article that systematically torches the Obama Administration for the Solyndra loan and at the end points out that the loan was more than the entire budget of ARPA-E.
ARPA-E is the “DARPA of Energy” and doing excellent work IMO. They are funding direct research in energy (read = the salaries of scientists rather than boondoggle factories) and their entire budget was 400MM or 127M less than Solyndra got.
Kaisersoze (298188) — 10/2/2011 @ 4:41 pmDRJ-
I imagine that local geological conditions would be a factor with geothermal (that’s the word I was blanking on). It is apparently relatively common in NW Ohio, and the people I’ve met using it are not at all “wealthy” by any but 3rd world standards.
I know two friends here in philly that installed solar panels on their roofs, but both said that without incentives and tax breaks and such they aren’t economical at all, and that they probably are still spending more money on electricity anyway in spite of that, but they both are engineering/push the envelope types who were interested in trying it. I think they kind of enjoy it as a hobby of sorts, and eagerly admit it is not a “solution” for much of anything.
In the meantime, I understand there are a number of “Beverly Hillbillies” stories with farmers getting paid for access to natural gas.
MD in Philly (3d3f72) — 10/2/2011 @ 5:17 pmAnd if the cost of gasoline included the military costs that we spend, yada yada yada. Natural gas costs are increasing, solar panel prices are decreasing. Do the math.
Kevin M (563f77) — 10/2/2011 @ 6:07 pmKevin, you should read the interview of Harold Hamm by Stephen Moore in the WSJ (no firewall)
http://online.wsj.com/article/SB10001424052970204226204576602524023932438.html
We have the ability, right now, to cut our purchases of imported petroleum drastically; if only the Feds would get out of the way.
Another Drew - Restore the Republic / Obama Sucks! (26b465) — 10/2/2011 @ 6:13 pmKarl, congratulations on the link to the Green Room by Instapundit on this article.
Another Drew - Restore the Republic / Obama Sucks! (26b465) — 10/2/2011 @ 6:16 pm-Comment by Kevin M — 10/2/2011 @ 1:18 pm-
Don’t solar panels lose efficiency over time and have a limited practical life span before they need to be replaced? If this is true, did you factor these replacement costs into your payoff calculations?
I had read that this was true and that a 15 year payoff would require replacing the panels before they were paid for, but I am not an expert and have not followed the latest technology. Can you speak to this?
Machinist (b6f7da) — 10/2/2011 @ 6:27 pmIt’s arguable that the 1969 Esso spill was the turning point, it was the beginning of the war on domestic production, which ironically was amplified
ian cormac (ed5f69) — 10/2/2011 @ 6:27 pmby the arab embargo, the TAP being one of the few exceptions, the second oil shock of ’79 didn’t teach us anything, and we spiraled toward ever more
dependence of foreign particularly Middle East Oil.
More Solyndra at Power Line:
A Company “by the name of Solyndra”
(you all know where to find it)
Another Drew - Restore the Republic / Obama Sucks! (26b465) — 10/2/2011 @ 6:31 pmModern monocrystaline solar panels degrade about 20% over 20-25 years. The curve depends on the process and manufacturer, with some dropping 5% almost immediately, and other taking a more gradual decline. I have heard it said that (cheaper) polycrystaline panels degrade faster. I haven’t researched thin film, since those made no sense for my applications. One of the reasons that a 15 year break-even, by itself, isn’t all that interesting.
Kevin M (563f77) — 10/2/2011 @ 6:35 pmThank you.
Machinist (b6f7da) — 10/2/2011 @ 6:37 pmBTW, Karl, about that “Scientific American” article: it is from the Climatewire blog, not the (more authoritative) magazine, and it includes a number of things that you failed to quote, such as:
and
Both of which pretty much agree with what I said. Although I question how they get from 77 cents per watt to 15 cents per KWhr, unless they insist on a 3 year payback — or they have stupendous operating costs (unions?).
Kevin M (563f77) — 10/2/2011 @ 6:41 pmB-but Obama supports abortion he is a feminists dream come true.
/Libtards
DohBiden (d54602) — 10/2/2011 @ 7:40 pmYes giving money to private schools=bad[except for the obamas]
Giving money to public schools=Alright especially since you cannot say god bless you
DohBiden (d54602) — 10/2/2011 @ 7:43 pmAD, I read that earlier. I agree with that, and I also think nuclear (especially small-scale thorium) is part of the mix. I just dislike throwing solar in with the silly stuff. BTW, I find that wind power is probably useful on a small scale, but will never amount to much. Solar on the other hand, will be a larger player than hydro someday.
Solyndra was a joke technologically, for reason having little to do with solar itself, and a lesson in why the feds should not favor some energy companies over others. Steve Chu should be embarrassed — he had to know better. I just object to painting all solar with this brush, much as I’d not want to use GM to bash automobiles in general.
Kevin M (563f77) — 10/2/2011 @ 7:46 pmKarl–
Lastly,
You really need to go look at the history of the nuclear industry. Not only was most research done on the government dime, but the risk of operating a nuclear plant was substantially subsidized. For example, the Price Anderson Indemnity Act, which is still in effect. Why is this OK for nuclear and not for solar?
Kevin M (563f77) — 10/2/2011 @ 7:55 pmYes giving money to private schools=bad[except for the obamas]
Don’t worry, Michelle Obama is one of us. I know this because she shops at Target.
Kaisersoze (298188) — 10/2/2011 @ 8:06 pmComment by Kevin M — 10/2/2011 @ 7:55 pm
Govt interference in atomic power most likely derives from the fact that atomic energy has been known to destroy cities, where no known capability is alleged for “solar rays”, disregarding melanomas.
Another Drew - Restore the Republic / Obama Sucks! (26b465) — 10/2/2011 @ 9:19 pmJoe Biden and his brother Frank Biden are an insult to america.
DohBiden (d54602) — 10/3/2011 @ 9:14 amAlso china is not a capitialist state.
DohBiden (d54602) — 10/3/2011 @ 9:42 amAsking a leftie about nuclear power is a bit like asking a 1930s communist about Hitler. I depends what day it is./
Mike K (8f3f19) — 10/3/2011 @ 6:05 pmSpeaking of scandal, no mention of Eric Holder in today’s LA Times. Fast and Furious is being ignored too.
AZ Bob (ffd720) — 10/5/2011 @ 7:14 am