Fremont-Based Solyndra Goes Bankrupt; 1,100 Workers Laid Off

I am in favor of removing all the oil subsidies, but that article was mainly true. Somehow we have double and triple standards. Many of the subsidies were created when oil prices were lower and are no longer needed if they ever were. The depreciation deduction is for all manufacturing, so the question is why oil should be singled out to be removed, most of those other manufacturers also would stay in america. The crazy thing is we have tax treatment that encourages manufacturers to locate in foreign countries. One of these is the sugar tarrif which causes many jobs to locate where the few sugar barrons don't get billions of profit from the government.

The proper treatment is to treat depreciation for oil the same as other manufacturers and to tax oil itself. That increases government revenue without causing yet another page of the tax code. Congress loves these kinds of special treatments since they get bribed, I mean campaign contributions, for uneven tax laws. Close all the loophole, but don't create extra special treatment. Remember toyota got money from the federal government to build manufacturing in Mississippi and texas, then closed manufacturing in California. They moved jobs and got tax credits to do it. That might be good for texas, but its bad for California and the government shouldn't be in that business.

It is money that goes to the government, which allows people to make claims. Royalties are a cost of doing business so should be deductible. If its a foreign government that should be a normal tax deduction for materials, not treated as foreign taxes paid. Not much wrong here, but some instead of clarifying the code want double taxation. What is wrong often is oil royalties are too low for the US government. That should get looked at. Setting the royalty and environmental standards in the US including flaring is important, but people focus on the subsidies. Some of these are not subsidies at all, and others are only a small part of the problem. Creating an oil tax, on both domestic and imported oil would go a long way to correcting some of the indirect subsidies, but that hasn't been tried since the early 90s. When it was attempted, there were such big giveaways to coal interests that even people that might have supported it voted against it.

Solyndra and many coal programs are crony capitalism. You can see in congress who gets paid, and who gets the favors. I don't see how you can defend Solyndra by saying its worse over there. That is a race to the bottom. How about enforcing good environmental regulations, and removing all the bad government give aways Seriously if you want more solar, the way to get it isn't a jobs program for political donations from California, that produces pollution not jobs.

 

The facts of the Solydra issue are quite complicated. The long and short of it is that Solyndra was as much a victim of circumstances as much as a bad business plan. Thier technology promised a more efficient solar product, but what happened was e confluence of a couple of market forces that emerged to take away that advantage. The first was the crashing, by an order of magnitude in the price of the raw material to make solar panels, making conventional PV much cheaper, diluting the efficiency advantge. Second WH a concerted effort by the Chinese to flood the market with Chinese PV, sold at or below cost, further driving down prices.

One can argue whether or not the government should be investing in cutting edge technology as a matter of public policy, but to say that the Solyndra support and subsequent collapse was merely political payoff for donations is simplistic at best, disengenious at worst.

Icarus

 

That doesn't sound like the facts at all. Solyndra produced a more expense less efficient solar panel. The business plan was that the savings in installation costs would outweigh the extra expense for the panels. They also could pack more panels on a flat roof. That sounded like a high risk business plan at the time to some in the DOE. In hindsight, its fairly obvious that the government was taking a large risk with these loans.

This would sound surprising, but.... many conventional solar panel manufacturers were predicting rapid price reductions with higher volumes. This was a well known risk at the time of solyndra's loan. It was also given as a reason for solar subsidies in the US, Europe, and Japan.

I don't see investment in technology here. It seems like the solyndra loan made a situation for public risk but private profit. We can see similar situation to the bank bailouts and poor regulation. I say poor instead of lack of, because there is a great deal of bad regulation setting up this legalized gambling with public funds. There really isn't much defense of it unless you like a corrupt political system. One excuse seems to be that the program was set up under bush. That seems like a poor excuse, both republicans and democrats are corrupt. Its not like one sides corruption is made alright by the other sides corruption. That simply sets up a system where the bad politicians win, and the american people lose.

Lowered priced panels would actually be expected to increase the amount of solar energy produced. Instead we have given money to politically connected contributors. Since they lost there bet, the american public loses. If they succeeded in there high risk venture, they would have kept all the profits. I do not understand the benefit of solyndra's technology, and neither did the market. If you want more solar in this country, I would think you would be happier with lower solar panel prices, instead of wanting higher prices to keep a favored government supported company afloat. Certainly private venture capital firms are more able to take the risks and keep the rewards of this new technology.

 

As I understand Solyndra technology, (and I admit, I am no expert here!) is that their technology produces more watt per sq foot of installed PV, and ergo was said to have an efficiency advantage. The thinking was, if you could produce 10% more power at a similar cost you would have an advantage. What they didn't count on (and hindsight suggests that perhaps they should have) was the crash in Silicon, more than off setting thier advantage.

Once again, I contend that to view it only in political terms is wrong.

That said, I am in NOT IN favour of subsiding any energy, and then alternatives can stand on thier own quite nicely. but I until we pay the cost of coal, and gas and nukes at the meter, PV gets a small share to compete. All in all, not a bad trade IMHO.

Icarus

 

Solyndra claimed that somehow because it could get more of the indirect light, that even though its peak efficiency was lower, it somehow would be higher over the day. I don't know of any verification of their claim, but lower efficiency was claimed as a reason of its failure,and dilligence at the time of investment should have shown that. The main claim was that it would cost 1/3 less to install on a flat roof than normal silicon solar panels. Solyndra claimed that they could drop costs with volume. By the time the loan was approved silicon based PV was already dropping with volume, and this was noted on the dilligence. This was high risk venture capital, but if it worked the VCs would make all the money not the US government that put up most of the money.

It did not subsidize solar, it subsidized solyndra's investors in thin film against existing PV companies. There is no evidence that if solyndra was sucessfull any more solar would be built. Which IMHO is a quid pro quo for campaign contributions. Everyone does it, but that doesn't make it right. Once solyndra was failing, the government gave them more money to prop them up. No big contracts to halibuton and low interest loans to solyndra always have excusses, but they are crony capitalism none the les.

 

Please see my edit to correct the typo,, to be clear I am not in favor or energy subsidies. But if we continue to subsidies othe fuels nd not pay thier costs, then solar deserves equal treatment.

Icarus

 

Hey, I would subsidize solar more. Locally we do. About 65% is paid for installing solar here. It veries in much of the country.

I just get fed up when people defend some government abuse because of "good intentions" or the other guys are worse. If the venture capital government loans for "green jobs" were the worst thing the government did, I would be ecstatic. I definitely don't think this even ranks in the top 25 bad things government has done in the last decade.

But for those forgetting the details
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