Last night my wife and I had dinner with a couple who are old-time friends.
While discussing several political and economic policy subjects, they seemed surprised that the loan program that funded Solyndra was started under President Bush. They thought the whole story was that once in office, Obama rushed a loan deal to political supporters - and then they went bankrupt.
He wanted to know more, so I put together the following. I told him, "Here are some facts about the company and the loan, which I welcome you to investigate and push back on, if there is contrary factual evidence."
You may have right-wing leaning friends who harp on the Solyndra deal - I hope this summary comes in handy for those situations.
This is material compiled from CNN and Think Progress and others, with updates.
Summary follows below the fold:
1. The program to provide funding for "renewable energy projects" was started by Bush in 2005. As reported back in September 2011, the "Bush Administration advanced the idea of the Solyndra loan guarantee for two years" before Obama became President. Here is a documented timeline of the events:
May 2005: Just as a global silicon shortage begins driving up prices of solar photovoltaics [PV], Solyndra is founded to provide a cost-competitive alternative to silicon-based panels.
July 2005: The Bush Administration signs the Energy Policy Act of 2005 into law, creating the 1703 loan guarantee program.
February 2006 - October 2006: In February, Solyndra raises its first round of venture financing worth $10.6 million from CMEA Capital, Redpoint Ventures, and U.S. Venture Partners. In October, Argonaut Venture Capital, an investment arm of George Kaiser, invests $17 million into Solyndra. Madrone Capital Partners, an investment arm of the Walton family, invests $7 million. Those investments are part of a $78.2 million fund.
December 2006: Solyndra Applies for a Loan Guarantee under the 1703 program.
Late 2007: Loan guarantee program is funded. Solyndra was one of 16 clean-tech companies deemed ready to move forward in the due diligence process. The Bush Administration DOE moves forward to develop a conditional commitment.
October 2008: Then Solyndra CEO Chris Gronet touted reasons for building in Silicon Valley and noted that the "company's second factory also will be built in Fremont, since a Department of Energy loan guarantee mandates a U.S. location."
November 2008: Silicon prices remain very high on the spot market, making non-silicon based thin film technologies like Solyndra's very attractive to investors. Solyndra also benefits from having very low installation costs. The company raises $144 million from ten different venture investors, including the Walton-family run Madrone Capital Partners. This brings total private investment to more than $450 million to date.
January 2009: In an effort to show it has done something to support renewable energy, the Bush Administration tries to take Solyndra before a DOE credit review committee before President Obama is inaugurated. The committee, consisting of career civil servants with financial expertise, remands the loan back to DOE "without prejudice" because it wasn't ready for conditional commitment.
March 2009: The same credit committee approves the strengthened loan application. The deal passes on to DOE's credit review board. Career staff (not political appointees) within the DOE issue a conditional commitment setting out terms for a guarantee.
June 2009: As more silicon production facilities come online while demand for PV wavers due to the economic slowdown, silicon prices start to drop. Meanwhile, the Chinese begin rapidly scaling domestic manufacturing and set a path toward dramatic, unforeseen cost reductions in PV. Between June of 2009 and August of 2011, PV prices drop more than 50%.
September 2009: Solyndra raises an additional $219 million from private investors. Shortly after, the DOE closes a $535 million loan guarantee after six months of due diligence. This is the first loan guarantee issued under the 1703 program. From application to closing, the process took three years â not the 41 days that is sometimes reported. OMB did raise some concerns in August not about the loan itself but how the loan should be "scored" [for its budget implications] OMB testified that they were comfortable with the final scoring.
January - June 2010: As the price of conventional silicon-based PV continues to fall due to low silicon prices and a glut of solar modules, investors and analysts start questioning Solyndra's ability to compete in the marketplace. Despite pulling its IPO (as dozens of companies did in 2010), Solyndra raises an additional $175 million from private investors.
November 2010: Solyndra closes an older manufacturing facility and concentrates operations at Fab 2, the plant funded by the $535 million loan guarantee. The Fab 2 plant is completed that same month â on time and on budget â employing around 3,000 construction workers during the build-out, just as the DOE projected.
February 2011: Due to a liquidity crisis, private investors provide $75 million to help restructure the loan guarantee. The DOE rightly assumed it was better to give Solyndra a fighting chance rather than liquidate the company, which was a going concern, for market value, which would have guaranteed significant losses.
March 2011: Republican Representatives complain that DOE funds are not being spent quickly enough.
House Energy and Commerce Committee Chairman Fred Upton (R-MI): "despite the Administration's urgency and haste to pass the bill [the American Recovery and Reinvestment Act], billions of dollars have yet to be spent."
And House Oversight and Investigations Subcommittee Chairman Cliff Stearns (R-FL): "The whole point of the Democrat's stimulus bill was to spend billions of dollars... most of the money still hasn't been spent."
June 2011: Average selling prices for solar modules drop to $1.50 a watt and continue on a pathway to $1 a watt. Solyndra says it has cut costs by 50%, but analysts worry how the company will compete with the dramatic changes in conventional PV.
August 2011: DOE refuses to restructure the loan a second time.
September 2011: Solyndra closes its manufacturing facility, lays off 1,100 workers and files for bankruptcy. The news is touted as a failure of the Obama Administration and the loan guarantee office. However, as of September 12, the DOE loan programs office closed or issued conditional commitments of $37.8 billion to projects around the country. The $535 million loan is only 1.3% of DOE's loan portfolio.
Meanwhile, after complaining about stimulus funds moving too slowly, Congressmen Fred Upton and Cliff Stearns are now claiming that the Administration was pushing funds out the door too quickly: "In the rush to get stimulus cash out the door, despite repeated claims by the Administration to the contrary, some bets were bad from the beginning."
What critics fail to mention is that the Solyndra deal is more than three years old, started under the Bush Administration, which tried to conditionally approve the loan right before Obama took office. Rather than "pushing funds out the door too quickly," the Obama Administration restructured the original loan when it came into office to further protect the taxpayers' investment.
2. Congress thought there would be more failures: Two companies have declared bankruptcy under the loan program so far, out of the 33 projects funded. Congress was expecting more. Congress appropriated money to cover expected losses, and multiple independent reviews have confirmed that the actual losses will likely be less than Congress expected.
3. Solyndra wanted more: The company applied for another $468 million in funding shortly after its first DOE loan closed. The government did not award the second request.
4. Taxpayers aren't the only losers: Private investors lost almost twice what the government did - nearly $1 billion. While much has been made that the largest private investor was an Obama supporter, the second largest was a fund controlled by the Walton family, of Wal-Mart fame. Walton family members are noted Republican donors.
5. The renewable program is closed: The renewables loan program that funded Solyndra and other wind and solar ventures is now over. There is still $170 million available for renewables under a separate program that also handles nuclear power.
6. No smoking gun with Solyndra wrongdoing: Last week Mitt Romney said an inspector general "looked at this investment and concluded that the administration had steered money to friends and family." That appears to be incorrect, as no evidence of undue influence peddling by the White House has been uncovered in an official, independent report. As a major Bloomberg analysis of Solyndra and the media hype of the story concluded, "The Focus on Solyndra Is Not Proportional to Its Impact."
7. Solyndra isn't a typical solar company: Solyndra did not make regular, flat solar panels. It made a more advanced, cylinder-shaped device designed to capture the sun's rays on its entire surface - hence the company's name. It was the rapidly declining price of traditional, flat solar panels and silicon - mostly from China - that did the company in.
If this is different than your news sources have portrayed, you might want to broaden your sources of news. If you find contradictory information, I'd like to see it.
You've heard the expression, "We're all entitled to our own opinions, but not our own facts". Until we can agree on facts, people will just be talking past each other.