A Costly Solar Flame-Out

Federal stimulus efforts to encourage “green energy” businesses took a shot to the chops today when Solyndra, a California solar energy company, declared that it will file for bankruptcy protection.

Solyndra had received $535 million in federal loan guarantees and was one of 40 concerns that was supported by a Department of Energy program designed to encourage green energy projects.  Today, however, the company suspended its manufacturing operations and laid off more than 1,000 workers.

It is not clear how much money the federal government will lose as a result of its support of Solyndra, and some no doubt will argue that such losses, whatever they may be, are simply a necessary cost of trying to develop “green energy” alternatives in the United States.  For others, however, Solyndra’s failure is a sobering lesson that even significant federal support doesn’t mean much if a company cannot hold its own in the rough and tumble world of the global economy.  In this instance, Solyndra apparently couldn’t compete with foreign manufacturers who sold comparable products at cheaper prices.  This story also raises more fundamental questions:  why should the federal government be supporting certain companies and industries at all, and when they do who is deciding whether the investment of our tax dollars has a prayer of earning a meaningful return?

 

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1 thought on “A Costly Solar Flame-Out

  1. The gov’t should not be funding private business. Business should be have the acumen necessary to gather capital investment. The taxpayer cannot afford the risk involved in venture capitalism. Perhaps a humble office building, until revenues increased, would have been pragmatic.

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