Fallout from the implosion of Fremont solar panel manufacturer Solyndra expanded Tuesday when California Treasurer Bill Lockyer called for a "pause" in the state clean-energy program that had provided Solyndra a $25.1 million tax break.
"In light of recent events, we owe it to taxpayers to see if there is more we can do to make sure we don't give their money to companies headed for a fall, or companies that take California's money and run to other states to create jobs," Lockyer said of the program, which gives solar and other alternative energy companies sales tax exemptions on manufacturing equipment.
Lockyer's move follows a failed attempt by House Republicans to slash funding for electric vehicles, and announcements that at least two solar companies expecting to be awarded federal loan guarantees from the Department of Energy have been told in the wake of Solyndra's collapse that their applications won't clear the Sept. 30 deadline.
Suddenly it seems that every government program related to cleantech is under increased scrutiny, review or outright attack.
Sacramento attorney Jon Costantino, an expert on clean energy policy who attended this week's Renewable Energy Finance Forum in San Francisco, summed up the new reality.
"Shadow of #Solyndra hangs over event," he tweeted Monday.
The collapse of Solyndra, which raised more than $1 billion from venture capitalists and won a $535 million loan guarantee in 2009 from
the Department of Energy, has triggered investigations by Congress and the Justice Department while igniting a political firestorm, with conservative critics citing it as proof that President Barack Obama's economic policies have failed.
"These are tough economic times, and we have our work cut out for us to make sure solar is not viewed only through the lens of one company," said Tom Kimbis, a vice president of SEIA, the Solar Energy Industries Association. "One hundred thousand Americans are employed in solar, and those points are getting lost in the storm that is Solyndra."
Rep. Anna Eshoo, D-Palo Alto, whose congressional district spans the heart of Silicon Valley, says Solyndra's finances and its Department of Energy loan guarantee deserve to be investigated by Congress because so much taxpayer money is at stake. But she argues that Solyndra's demise has been blown out of proportion, and she notes that many companies the government has supported, including Palo Alto's Tesla Motors, are growing and creating jobs.
"The Republican majority views Solyndra as red meat, and these attacks take a toll," Eshoo said. "When these broad attacks are made it's like a very effective bomb. It doesn't just hit the target -- there's collateral damage."
Last week, House Republicans tried to cut funding for the Advanced Technology Vehicles Manufacturing (ATVM) Loan Program, also overseen by the Department of Energy, arguing that the money was needed to pay for Hurricane Irene cleanup. The ATVM program supports electric vehicle startups like Fisker Automotive and Tesla Motors, as well as Ford, which used a $5.9 billion ATVM loan to upgrade factories in the Midwest.
Eshoo mounted a ferocious fight to save the program and succeeded after 108 members of Congress signed a letter of support and the U.S. Chamber of Commerce, environmental groups and the United Auto Workers lobbied on the program's behalf.
"The ATVM program was signed into law by President George W. Bush. It's saved and created jobs, and a phoenix is rising from the ashes of the NUMMI plant," said Eshoo, referring to Tesla's purchase of the former New United Motor Manufacturing Inc. plant in Fremont. "Silicon Valley is unique: We believe in guts and ideas and ingenuity. In many ways, you don't count if you haven't failed. It's important to be a risk taker. And there's a difference between risk and waste."
One victim of the Solyndra fallout is San Mateo-based SolarCity, which was told it would not get a $275 million loan guarantee to help install solar panels on military housing because of "increased documentation requirements."
"We believe that the valuable work done to move the SolarStrong project to completion should not be lost because of the Solyndra bankruptcy," wrote CEO Lyndon Rive in a letter to Congress asking for an extension. "SolarStrong sharply contrasts with Solyndra in every regard concerning risk and cost to the government."
Another victim is First Solar of Tempe, Ariz., which was told in June that its Topaz Solar Farm project in San Luis Obispo County had been awarded a conditional commitment for a $1.9 million Department of Energy loan guarantee. Late last week, the company announced it would not meet the Friday deadline because there was "insufficient time" to process requirements.
First Solar is in discussions with potential buyers for the project, and spokesman Alan Bernheimer declined to say what requirements are keeping the company from meeting the deadline. But privately, many solar industry analysts say the Department of Energy has no choice, given the political climate, but to become more stringent with any pending loans.
If loan guarantees fall through, companies can still seek private financing. And the private sector is still bullish on solar: Google announced a $75 million investment Tuesday to create a fund with San Francisco startup Clean Power Finance that will help as many as 3,000 homeowners go solar.
Contact Dana Hull at 408-920-2706. Follow her at Twitter.com/danahull.
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