Chinese solar panels are 10-20 percent less expensive than U.S.-made panels; but by some estimates, Solyndra's panels were 100 percent more. It's a mistake to blame Solyndra's problems on our lack of manufacturing commitment or relatively higher labor costs compared to China. Solar panels are commodities being sold on the worldwide market on a $/watt basis much as aluminum is sold on a $/kg basis. It is crystal clear that cheap and easy to install solar panels are exactly what the U.S. needs to reduce our energy costs and create installation jobs.
For five years or more, the U.S. government was providing support for solar manufacturing in the U.S. The DOE Loan Guarantee program provided critical funding for Solyndra's manufacturing growth, supported by over $1 billion in private capital. Unfortunately, both these private investors and the DOE made a couple of bets on Solyndra that didn't pan out.
The first bad bet was that refined silicon, the feedstock for the solar panel industry, would stay expensive. Solyndra invented a solar panel that didn't use expensive silicon. Unfortunately for Solyndra, and fortunately for all the silicon solar panel manufacturers and customers, silicon has gotten very cheap over the past few years. So, the problem that Solyndra solved: expensive silicon disappeared.
The second bad bet was that Solyndra's flat roof installation technology would make up for their relatively expensive panels. Solyndra did indeed see big savings on flat roof installations, but the rest of the industry did not stand still. Other commercial flat roof products are on the market (full disclosure, Westinghouse Solar has an inexpensive and easy to install flat roof solar panel product) with similar benefits at much lower costs to Solyndra.
Management and investors finally pulled the plug when two things became brutally apparent. First, that silicon wasn't going to get expensive again. And second, Solyndra's installation advantage couldn't overcome similar products that were on the market at much lower prices.
It was a great attempt at solving a big problem: reducing solar installation costs. I hope the U.S. Government is made whole on their DOE loan guarantee (which, notably was initiated during the Bush administration). I hope we don't bash overseas manufacturers for making commodity solar panels cheaper than we can in the U.S.; after all, we all want inexpensive solar panels. I hope that Solyndra technology and employees continue to thrive in the emerging clean technology industry which they helped to pioneer.
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The good news that might get lost in the bad news is that solar power continues rapidly down a price reduction curve and is becoming more and more affordable. The bottom line: "we all want inexpensive solar panels". Price and demand, production volumes and economy of scale are synergistically inter-related.
Whether or not he US fed's bet was wise is hard to say although hind-sight is rarely a fair judge. The bad news is that technology is often a gamble: quite simply, we don't know what we don't know. Unfortunately, the general public want's to see it as a 'sure thing'. Recently, there has been a popular press story going around about Steve Jobs' several muffed product ideas; for example, was it a bad idea to blow a lot of cash on Lisa ... or did the lessons learned help make Apple a better company? Many expensively developed technologies go thunk and yet the industry as a whole moves on: Wankel rotary engine, thalidomide, 8 track tape, Beta, the zonkey, ... anyone??