What We Can Learn from Solyndra's Failure

Our national conversation has become so politicized that it's hard to talk about anything without setting off an argument.

Not the weather. And certainly not the failure of Solyndra, the solar company that went bankrupt after getting a $535 million loan from the Obama administration.

Yesterday's hearing of the Republican-led House Committee on Oversight and Government Reform, focusing in part on Solyndra, was more like an inquisition than a fact-finding exercise.

It was titled "How Obama's Green Energy Agenda is Killing Jobs." That was before the testimony began.

No matter that chief inquisitor Darrell Issa, who now denounces clean energy subsidies, once sought a loan guarantee for Aptera, an electric car maker that wanted to set up shop in his district. Dan Burton, the No. 2 Republican on the panel, supported a federal guarantee for Abound Solar, a company in his district.

What hypocrisy.

Democrats are little better, particularly as they blather on about green jobs. Sure, when Washington subsidizes clean energy, jobs may be created. The thing is, when the government subsidizes anything (oil exploration, ethanol, high fructose corn syrup, home ownership), you get more of it, and more jobs. Does this mean that market-distorting subsidies are an efficient way to create jobs? The question answers itself.

[By the way, there was some amusing back-and-forth at the hearing about what constitutes a green job. It turns out that bus drivers, whether driving they are driving hybrid buses or not, are doing "green jobs" because mass transport is greener than driving, my friend Matthew Wald reports in The Times.]

So what, if anything, can we learn from Solyndra's failure? Should the government stop financing clean energy, as some Republicans say? Or preserve today's subsidies, as the industry would like?

To put the Solyndra story in context, I listened to a call yesterday with two solar industry veterans, Dan Shugar, the CEO of Solaria and Arno Harris, the CEO of Recurrent Energy. Neither company, for the record, has received direct loan guarantees from the energy department (and I know from my past dealings with him that Shugar's a straight shooter).

First, Solyndra's failure does not mean there's anything wrong with the solar business. Just the opposite.

"Contrary to all the chatter out there, solar's here, solar's ready, solar's booming," said Harris. The Solar Energy Industries Association reported this week that the solar PV market grew by 69 percent during the second quarter of 2011, compared to Q2 of 2010. The group said:

The U.S. remains poised to install 1,750 megawatts of PV in 2011, double last year's total and enough to power 350,000 homes.

The industry employs about 100,000 people. "Solar employs more Americans than coal mining or iron and steel manufacturing," Harris noted. Then again, Walmart employs 1.4 million people in the U.S.