Solyndra executives, CEO Brian Harrison and CFO Bill Stover, were pummeled in a Congressional hearing last Friday, mostly by Republicans who wanted to know what happened to the $528 million in federal loan money and why the loans were made subordinate to a $75 million private loan. Democrats were also unhappy.
Rep. Diana DeGette from Colorado echoed a common sentiment, wondering how the CEO could have met with her and others in July, say everything was fine “and declare bankruptcy five weeks later.” Texas Republican Joe Barton was more blunt. He asked, “How does a company go from having the president of the United States visit it to having the F.B.I. come in and confiscate its files?”
Both executives refused to answer any questions, invoking their constitutional right against self-incrimination by taking the Fifth Amendment. They said they did so at the advice of their lawyers. While this is certainly legal and even understandable, it certainly doesn’t help their cause in the court of public opinion. Republicans threw so many hostile accusations at them that Democrat Henry Waxman finally complained, in effect saying this was like punching someone who couldn’t punch back. But still, there are many unanswered questions.
Repercussions from the Solyndra bankruptcy are already being felt. Solar industry giant First Solar said it will not meet a Sept. 30 deadline to complete Department of Energy requirements for a $1.93 billion loan for a 550 MW solar plant in San Luis Obispo County. The company said DOE requirements were more onerous than private loans. However, a UBS analyst said the Solyndra bankruptcy was one reason for this. Perhaps another reason is First Solar doesn’t want to go through a hugely politicized, highly visible review of their loan, regardless of its merits. Republicans are investigating all loans for renewable energy made under a DOE program that ends this month and warning DOE to go slow on approval. Many of these projects, mostly big solar, are planned for California.
Nationwide solar panel installer SolarCity, which is based in San Mateo, also said it will not pursue a DOE loan to install solar on military family homes, citing increased paperwork resulting from the Solyndra bankruptcy (There is some good news for solar though. SolarCity will be installing solar panels on 60 more Walmart stores in California).
So, the DOE loan program hasn’t quite expired yet and two companies whose business directly affects California have already balked on getting loans. Further, what looked doable a few months ago – extending the DOE program – now seems problematic. Thus, California’s hyper-ambitious plan to have 33% renewable energy by 2020 will definitely be impacted as projects that were expected to get federal funds now probably won’t.