Beyond the Solyndra Circus: A Golden Age for Solar

Welcome to the Golden Age of Solar Power

A case can definitely be made. In the past two years, solar PV cell prices have plummeted by more than half, and total installation costs by about 30 percent. Solar deployment in the U.S., from residential rooftops to utility-scale PV power plants, has soared. Grid-connected PV grew 69 percent (over 2010) in the second quarter to 314 megawatts. Six states installed at least 10 MW in the quarter; that’s more than all but three states added in 2007 for the entire year.

The installation business itself, a fragmented mom-and-pop market niche not long ago, has been transformed into a booming industry for the likes of nationwide service/financing companies SolarCity, Sungevity, and SunRun. Walmart says it will install solar on 75 percent of its stores in California. And the world’s 11th largest company, Total, announced that it would pay $1.37 billion for a controlling interest in SunPower back in April.

But you’d obviously never know these developments from following the Capitol Hill and media frenzy since August 31st. That was the Black Wednesday when Solyndra declared bankruptcy and ceased operations, going from a promising, well-funded solar PV startup to the Republican party’s favorite political piñata. Depending on the day and the attacker, Solyndra represents: everything wrong with government support of new technologies; proof that green jobs, and President Obama’s support of same, are a miserable failure; or most troubling of all, an indictment of the entire clean-energy sector.

In a perfect world (and in fact, a world that does exist to some extent in other nations), clean energy would not be a partisan issue. I’d like to think that an industry devoted to American innovation, entrepreneurship, job creation, reduced dependence on foreign oil, and a healthier future for our children wouldn’t raise anyone’s political hackles. There actually are encouraging examples of this, well under the cable-news radar. Clean-tech factories and biorefineries are springing up in places like Arkansas and Mississippi, and conservative Kansas Republican Governor Sam Brownback, the former senator and onetime presidential candidate, recently penned an op-ed in the Wichita Eagle supporting an extension of the federal production tax credit for wind power. “Experience has taught us,” Brownback wrote, “that investment in the renewable-energy economy is creating jobs across all employment sectors.”

But it has been a very different story in the Congressional hearings on the Solyndra debacle. Leading the partisan pile-on, Rep. Darrell Issa (R-Calif.) accused the Obama administration of waging a “war on carbon-based energy.” Issa’s accusation is not original; it has been a right-wing talking point since at least early 2010. Issa and his allies conveniently ignore Obama’s approval of the TransCanada Keystone XL pipeline for oil from Alberta’s tar sands, his opening of vast new areas to potential offshore drilling, and his decision not to enact new restrictions on ozone-causing emissions.

But they’re calling it a war, and in war, the first casualty is truth, said ancient Greek dramatist Aeschylus. Why must it be a war? Why can’t we support newer, cleaner forms of energy as we continue to subsidize fossil fuels to the tune of at least $61 billion last year, according to the 2011 report from watchdog group Green Scissors, whose partners range from Friends of the Earth to the libertarian Heartland Institute. 

Was Solyndra a bad bet? In retrospect, of course it was – and many venerable stars of venture capital, including Madrone Capital, RockPort Capital, and U.S. Venture Partners, lost a lot of money as investors in the company. If there was any malfeasance on the part of Solyndra’s management, it should absolutely be investigated and prosecuted. But let’s put things in perspective: Solyndra’s $528 million loss represents less than two percent of the Department of Energy’s loan guarantee program (launched under President George W. Bush) for new energy technologies. 

Despite the political firestorm, DOE to its credit did not hold back in approving a slew of clean-energy loan guarantees before the program expired at the end of last month [Sept]. In solar, the big beneficiaries were development projects rather than companies – more than $5 billion in guarantees for six projects with combined capacity of more than 2,000 MW from SunPower, Sempra, SolarReserve, First Solar, and industrial real estate manager Prologis. Financing deployment projects (particularly those with power purchase agreements in place) is generally a much lower risk than funding new technology developers like Solyndra, and deployment deserves at least as much government support as R&D, as my Clean Edge colleague Trevor Winnie wrote earlier this year.

Here’s what really gets me about the Solyndra-fueled backlash against clean tech in general, and the solar power industry in particular. For years, the biggest criticism of solar as a major electricity source has been its high cost. Now, the same downward price pressure that has claimed PV cell-manufacturing victims like Solyndra, Evergreen Solar, and others is fueling an unprecedented U.S. boom in installation and deployment. At Clean Edge, we project that installed solar PV costs in the U.S. – without subsidies – will be competitive with residential electricity prices in more than half the states by 2020.  

Yet I’d bet good money that some of the people and politicians now decrying the entire sector because of Solyndra were the very same ones squawking, “Solar’s too expensive!” in the past. That’s no longer the case. As happened in semiconductors and many other industries before it, these rapidly declining cost curves present huge challenges for U.S.-based crystalline PV manufacturers trying to compete with low-cost competitors in China and elsewhere. But for scaling up solar as a significant energy source in the U.S. and around the world – and for companies in most other parts of the solar value chain – they are very good news.

It would be nice if the people actually elected to set our nation’s policies could understand that. 

Wilder is Clean Edge's senior editor, co-author of The Clean Tech Revolution, and a blogger about clean-tech issues for the Green section of The Huffington Post. His new book, Clean Tech Nation, co-authored with Ron Pernick, will be released next year. E-mail him at wilder@cleanedge.com and follow him on Twitter at @Clint_Wilder.