Published September 30, 2012
The federal government is making another big bet on solar panel manufacturing with taxpayer money, hoping the third time will be the charm.
SoloPower held its grand opening Thursday in Portland, Ore., with speeches from local politicians and a ribbon-cutting. "It really revolutionizes rooftop applications, and it makes solar both easy and cost effective for nearly any commercial and industrial building worldwide," CEO Tim Harris said.
SoloPower closed on a guaranteed government loan of $197 million last August, about the time another solar panel manufacturer, Solyndra, filed for bankruptcy. The failure of Solyndra cost U.S. taxpayers more than a half-billion dollars.
The second solar panel maker that received a loan from the Department of Energy, Abound, is also now in bankruptcy. Based in Longmont, Colo., Abound spent $70 million of its green energy loan and next week will auction off its equipment in hopes of paying some of that back.
Industry analysts are not optimistic about SoloPower's prospects.
"It's questionable at this point," says Andrew Soare of Lux Research, "It's uncertain if solar power will be able to produce efficiently and economically at scale. It's something that has not been done yet, and it's still risky."
Soare points to the price advantage enjoyed by Chinese manufacturers which has helped them grab a majority of the U.S. market share. Chinese solar panels are about 30 percent cheaper than ones made in America. The Commerce Department is urging President Obama to slap a tariff on Chines imports.
But SoloPower doesn't view China as competitors because they make far different products. SoloPower manufacturers "thin film," flexible and lightweight panels that can be installed on large commercial and industrial rooftops.
Environmental groups continue to support the federal green power loan program.
"We're just on the cusp of a whole revolution," says Ross Macfarlane of Climate Solutions. "Many (companies) will fail, but the key ones will succeed and they're going to lead us."
But William Yeatman of the Competitive Enterprise Institute says the Energy Department's green loan program created with federal stimulus money has been a failure by any measure. Congress appropriated $4.5 billion for it. Solar panel bankruptcies alone have cost taxpayers $600 million and if SoloPower stumbles, the losses will go even higher. A fourth company, 1366 Technologies, received a $150 million loan but has not even built its manufacturing plant yet.
Yeatman has little faith in SoloPower: "It looks like it will fail for the same reasons as Solyndra."
Much of the debate following Solyndra's collapse has centered on government's role in emerging technologies. Green groups say government has supported the oil industry through tax breaks, so it's essential to help alternative fuels to wean us off carbon.
But John Charles of the Cascade Policy Institute said government just gets in the way.
"It's a terrible risk," Charles said. "This is a program that should not even exist, even if the risk was low. It is not a proper function of government to be a venture capital fund."
SoloPower expects to start spending the taxpayer money late this year.