Solyndra

[Guest]

http://abcnews.go.com/Blotter/feds-r...ry?id=14476848

Maybe someone who knows how can post the text here.

Is this fiasco a "public-private partnership" as described in "The Post-Catastrophe Economy", or is it something altogether different?

Loan guarantees to favored cronies would be one reason why I'd be concerned about any attempt to mix private and public. Is there some other way to accomplish the goals?

I'd also note that this is quite a statement on the mixed consequences of globalization.

[lektrode]

Re: Solyndra

altho its bad news for the competitive position of The US, it sez even more about the perils of crony capitalism and the .gov 'picking favorites'...

http://abcnews.go.com/Blotter/feds-r...ry?id=14476848

This story has been updated.
Federal agents have expanded their examination of the now-bankrupt California solar power company Solyndra, visiting the homes of the company's CEO and two of its executives, examining computer files and documents, iWatch News and ABC News have learned.
Agents visited the homes of CEO Brian Harrison and company founder Chris Gronet and a former executive, according to a source who agreed to speak only on the condition of anonymity because of the legal sensitivity of the situation.
Gronet, reached at his home Friday morning, did not dispute that his home was visited by federal agents a day earlier.
"I'm sorry," Gronet said, "you probably understand full well that I cannot comment." The third executive could not be immediately reached.
Solyndra spokesman David Miller confirmed agents visited Harrison's home on the same day the FBI and Energy Department Inspector General seized boxes of records from the company's headquarters.
"Yeah, they did go to his house and speak to him briefly," Miller said. "I don't know what they may have taken. I believe they took a look at his computer."

Julie Sohn, a spokeswoman with the FBI in San Francisco, declined to discuss details of the government's investigation. "Unfortunately, our affidavits are still sealed so we can't go into any details," Sohn said.
The raid and visits come amid increasing evidence the Justice Department and Inspector General are exploring whether Solyndra mislead the government in securing its $535 million loan in 2009 -- and landing a vital refinancing of that loan earlier this year. Beginning in March, ABC News, in partnership with iWatch News/the Center for Public Integrity, was first to report on simmering questions about the role political influence may have played Solyndra's selection as the Obama administration's first loan guarantee recipient. One of the lead private investors in Solyndra was an Oklahoma billionaire who served as an Obama "bundler," raising money during the 2008 presidential campaign.
Members of Congress leading a House investigation of the DOE loan have focused specifically on visits Solyndra CEO Harrison made to Washington in July, when he said the company was on sound footing and expanding.
Democrats Now Questioning Solyndra Deal


Republican members of the House have said that bankruptcy indicates the deal was doomed from the start. Now, even Democratic leaders are questioning whether Solyndra misled the government.
"Less than two months ago, Mr. Harrison met with us and other Committee members to assure us that Solyndra was in a strong financial position and in no danger of failing," Reps. Diana DeGette, D-Colorado, and Henry Waxman, D-California, wrote to Republicans leading the investigation. "These assurances appear to contrast starkly with his company's decision to file for bankruptcy last week."
Those questions reveal a significant turn, as DeGette and Waxman were among members to vote against subpoenaing the White House budget office for records on the loan. Now, they are among those posing questions -- as the House has called Harrison to testify next week.

Miller, the Solyndra spokesman, noted that Harrison was not with the company when it secured the loan in 2009. He was, however, the chief executive when Solyndra landed a government refinancing that extended its payment period.
When Harrison came to Washington in July, he said, the company was hoping to land more financing to stay afloat. "When we were there, the circumstances of the company, business was good, we had record shipments. We had momentum in the marketplace," Miller said.

The Energy Department was keeping a close eye on Solyndra during those crucial months – sitting in on board meetings as an observer as part of the loan restructuring, iWatch News and ABC reported Thursday. That raises key questions: Did DOE miss obvious warning signs of the company's troubles in the final months before its collapse?
Obama Bundler Backed Solyndra


In 2009, the Energy Department put Solyndra's application on a fast-track for approval, and announced the award with great fanfare. The generous terms of the government loan included the lowest interest of all the green projects benefitting from Energy Department help, iWatch News and ABC News found.
And as part of the deal, the Energy Department agreed that if the company went bust, private investors could recoup their losses before the government. Republicans in Congress called the investment "a bad bet" and said it "put taxpayers at unnecessary risk."
One of the lead private investors in Solyndra was an Oklahoma billionaire who served as an Obama "bundler," raising money during the 2008 presidential campaign.
The bundler, George Kaiser, has declined to comment. His firm, Argonaut Ventures and its affiliates have been the single largest shareholder of Solyndra, according to SEC filings and other records. The company holds 39 percent of Solyndra's parent company, bankruptcy records filed Tuesday show.
Energy officials have repeatedly denied allegations that Solyndra received special treatment, saying the selection process was even handed. Until two weeks ago, the Obama administration held out Solyndra as a model for its green energy program, which was devised to create jobs and spur investment in cleaner sources of energy. President Obama personally visited the Solyndra plant last year, and his Energy Department made it the first to win approval of a federal loan guarantee. The $535 million federal investment enabled the company to build a sprawling manufacturing facility.



Under terms of the bankruptcy filing, investors including Argonaut -- which led a $75 million round of financing for Solyndra earlier this year -- will stand in line before the federal government and other creditors to recoup losses. Energy officials confirmed this arrangement, saying that after private investors including Kaiser recover $75 million, the U.S. government would have a chance to seek $150 million of its investment. Private investors will not be made whole, however, and stand to lose almost a billion dollars.


Kaiser has declined interview requests for months from iWatch News and ABC News. Calls went unreturned again on Thursday. HisTulsa-based George Kaiser Family Foundation, which in 2009 cited a $342 million investment value in Solyndra, issued a statement after Solyndra's collapse, citing "serious challenges in the marketplace, especially the drastic decline in solar panel prices during the past two years caused in part by subsidies provided by the government of China to Chinese solar panel manufacturers."
Energy officials have said they viewed the Solyndra venture as a possible "game changer" in the green energy movement.
"Sophisticated, professional private investors, who put more than $1 billion of their own money behind Solyndra, came to the same conclusion as the Department: that Solyndra was an extremely promising company with innovative technology and a very good investment," a spokesman said this week.
Editor's Note: An earlier version of this story stated that the homes of Solyndra executives had been searched. Solyndra officials say that while agents visited homes of key executives, they did not search them.

[lektrode]

Re: Solyndra

http://brucekrasting.blogspot.com/20...onnection.html

[Starving Steve]

Re: Solyndra

The bottom-line for slow learners: a $400 million or $500 million loss for taxpayers thanks to mis-guided government policy by the Obama Administration to support "green energy" development and "green energy" projects. And for those "sophisticated" private investors in Solyndra who supported and invested in Solyndra's so-called, "game-changer technology in the green energy movement"--- a one-billion dollar loss.

This is just the beginning of the bursting of the green energy bubble. Silicon Valley will be hard hit.

[mooncliff]

Re: Solyndra

Fifteen years ago, I thought it was Japan that would produce the photovoltaics that would power the world. However, it turned out to be China, which as all countries do, highly subsidizes the production of photovoltaic factories. The Chinese engineers are now the equal of the engineers in the US in certain fields like this. This makes it extremely difficult for production in the US to compete. Silicon Valley and US producers will be hard hit not because of misguided or crony government policy, but because we don't have the engineers (no one wants to major in it and the good ones are making weapons) and we don't have coordinated government policy giving free land for factories, etc.

We bailed out General Motors. How much did that cost? And they are going to go bankrupt again and all their pension liabilities are going to get dumped on the taxpayer. No doubt there was monkey business going on at Solyndra, but compared to the fake wars, the military industrial complex, the pharmaceutical industry forcing people to buy expensive drugs that do not work any better but cost ten times as much to the prescription drug plan and then refund the copayment to the patient to make sure the patient picks the most expensive one, and on and on, this seems trivial, except that it touches emotional hot buttons.

I have corrected multimillion dollar reports that were completely wrong and would have caused clients to lose millions. Afterwards, the boss complained that I put a comma in the wrong place. He didn't think there was anything wrong with the reports to begin with, until I explained why they were wrong. There was stunned silence in the room as the explanation progressed. This is how deep irrationality goes. So as long as one allows emotion to distort the train of thought, that is what you will get.

[Ghent12]

Re: Solyndra

Well we are certainly better off, in terms of engineering, than the UK. Word on the grapevine is that they villify engineers as abnormal social pariahs.

You can blame any real or perceived decline in American engineering, at least a good portion of it, squarely on the shoulders of FIRE. Why be in a challenging career with decent pay and benefits when you can be in a cakewalk career with obscene pay and benefits? On campus here at the University of Oklahoma, the most competitive engineering field is petroleum because that's where the money (still) is. Aerospace and mechanical is right behind because there's quite a lot of money in that too. Civil or industrial engineers though? Those are fields commonly chosen after attrition from other programs (not to say that many don't choose those fields first).

[aaron]

Re: Solyndra

This makes it extremely difficult for production in the US to compete. Silicon Valley and US producers will be hard hit not because of misguided or crony government policy, but because we don't have the engineers (no one wants to major in it and the good ones are making weapons) and we don't have coordinated government policy giving free land for factories, etc.

That is an industry lie. The truth is that we do not have enough engineers who are willing to work for minimum wage. China's "engineers", you will find after some research, are what we would consider junior college graduates and high school "shop" class graduates. They are NOT producing real engineers.

But, it only takes one smart engineer to direct 50 Chinese engineers to screw in a light bulb. They come here, get their education, and go back to China and get paid what they are worth. Here, you can spend 100k on a degree, then you get a job programming for a company for at least 60 hours a week, and you end up paid 50K - 150K. If you work it out, including all the studying necessary to keep up with the industry, I suspect an American engineer, on average, is exploited more than other professions. I know I would not be able to survive on only my salary.

There is no union representing American engineers. American tech workers have no voice, no organization, and nobody in Congress who cares. We only protect old-ass industries.

[c1ue]

Re: Solyndra

However, it turned out to be China, which as all countries do, highly subsidizes the production of photovoltaic factories.

Solyndra was directly subsidized by the US government to the tune of over $500 million.

While China's government does provide direct subsidies in the form of loan guarantees similar to the Solyndra federal guarantees, as well as discounts on land and electricity, China's government does not provide subsidies for Chinese consumers to install solar.

The US subsidizes consumer install of solar both via outright subsidies on purchase as well as feed-in tariffs for electricity generated by solar PV.

Solyndra's failure has nothing to do with unequal government support. It has everything to do with an uncompetitive technology combined with government guarantees which Solyndra thought would insulate them from the competition, but apparently Solyndra was wrong.

The consumer subsidies just wound up getting paid to the cheapest maker of solar PV - which apparently isn't Solyndra.

As we speak the airwaves and print media, at least in the Bay Area, are being bombarded by advertisements for solar PV installs.

The Chinese engineers are now the equal of the engineers in the US in certain fields like this.

Solar PV is very little about engineering development - at least present production solar panels - and everything about manufacturing and cost.

Japan can do the manufacturing, but clearly cannot do the cost.

[*T*]

Re: Solyndra

China are producing world class engineers... In British and American universities. They come here hoping for better prospects but go back home for jobs. I had one master's student, a first fromOxford, went back to a fairly middling job inChina.

Re PFI, in the UK at least, it was abused as a method of taking on huge off-balance sheet liabilities for investment. We didn't get good value out of it at all.

[Guest]

Re: Solyndra

Ok, where to start...

If there is a shortage of US engineers the market should address that with higher wages. But if instead we outsource engineering needs or import foreign engineers willing to work at lower wages that will never happen. We indirectly subsidize engineering education for foreign students by educating them at our universities. One reason few are majoring in engineering is that in our media dominated culture, there are no TV shows about engineers, engineering is not glamorized, and TV instead portrays true "success" as being in other fields like law, FIRE economy stuff(Mr. Trump's show), medicine, law enforcement, etc. If an engineer could make even half what an ambulance chasing lawyer, a wall street worker, or an MD could, there would be more engineering students. Globalism-fetishism where national self-interest is considered a bad thing leads to global corporations calling the shots.

The land cost required to build a high tech factory is fairly negligible compared to the other costs. (unless you're Solyndra, who foolishly choose to build a new facility on some of the most expensive land in the US). Drive through parts of the country besides the coasts. It's empty and the land is cheap. Potential workers are close enough to these rural areas and with 17% real under/unemployment you would probably not have trouble getting them to move to where the jobs are. There are numerous empty facilities as well, available on the cheap. When's the last time a new city was founded in the US? Instead of crowding into urban hell holes we should be efficiently using land accross the nation. Wages could be lower while returning the same standard of living due to lower costs of living (imagine the cost of a home in rural S.C. vs one in silicon valley). You could save 20% in labor costs by locating away from high-cost areas.

Government subsidy of private industry leads to malinvestments and distorted signals to the market. It also leads to corruption as only the connected get the subsidies and when the subsidies are removed the industry may be uncompetitive. Therefore a permanent state of public subsidy of private companies exists. I don't know about you but I'm not really into helping other people make money w/o sharing the proceeds with me. So, we're left with uncompetitiveness vs other nations. The options are to follow them into the morass of mass subsidies or to prohibit imports of subsidized products. Free trade and fair trade are different.

As for drugs, insurers have the incentive to cover only effective cheaper drugs rather than ineffective more expensive ones. And ultimately the drug manufacturer owns the drug. Just as you get to choose to work for your price, they get to choose to sell products for their desired price. Blocking that incentive would only lead to fewer effective drugs being developed. Not a perfect system, but beware of the unintended consequences of trying to change it.

Fifteen years ago, I thought it was Japan that would produce the photovoltaics that would power the world. However, it turned out to be China, which as all countries do, highly subsidizes the production of photovoltaic factories. The Chinese engineers are now the equal of the engineers in the US in certain fields like this. This makes it extremely difficult for production in the US to compete. Silicon Valley and US producers will be hard hit not because of misguided or crony government policy, but because we don't have the engineers (no one wants to major in it and the good ones are making weapons) and we don't have coordinated government policy giving free land for factories, etc.

We bailed out General Motors. How much did that cost? And they are going to go bankrupt again and all their pension liabilities are going to get dumped on the taxpayer. No doubt there was monkey business going on at Solyndra, but compared to the fake wars, the military industrial complex, the pharmaceutical industry forcing people to buy expensive drugs that do not work any better but cost ten times as much to the prescription drug plan and then refund the copayment to the patient to make sure the patient picks the most expensive one, and on and on, this seems trivial, except that it touches emotional hot buttons.

I have corrected multimillion dollar reports that were completely wrong and would have caused clients to lose millions. Afterwards, the boss complained that I put a comma in the wrong place. He didn't think there was anything wrong with the reports to begin with, until I explained why they were wrong. There was stunned silence in the room as the explanation progressed. This is how deep irrationality goes. So as long as one allows emotion to distort the train of thought, that is what you will get.

[Guest]

Re: Solyndra

Thanks. I'm still confused as to whether or not this is the type arrangement EJ suggests in his recent book. Hopefully someone can sort it out.

[Starving Steve]

Re: Solyndra

The whole concept of solar-electric providing meaningful energy to the grid, and providing that energy at the time it is needed on the grid or in your house needs to be closely examined. Not just the endless grants for the industry and not just the corruption in the companies, but the entire theory of solar-electric needs to be critically examined from a workability point of view.

Let's begin: The Earth's average per day at sea-level on a perpendicular surface solar insolation is 6 kwh / m^2 (per day). This is for clear days only. So this sounds pretty good, like at a 7 cent per kwh electric rate, a 10 square metre solar-electric system might produce, if it was 100% efficient, 42 cents / m^2 / day in power on clear days.

But kiddies, here is the rub: Most places do not have many clear days. Then most places have humidity which attenuates the solar radiation. Then most places have dust or haze in the atmosphere, and especially in deserts. Southern California has dust, haze, humidity, and sometimes even smoke problems especially during fire season. But let's continue.....

To install this solar-electric system, to make it in any way practical in theory, you need at least 10 square metres of solar panels. Then you need a rotator to keep the panels perpendicular to the Sun's rays during the day. Then, you have to adjust the rotator for the seasons. Then the rotator needs energy to run. Then, you need a storage bank to store the the DC power. Then you need an inverter to convert the DC to AC at 60 cycles per second. Then you need to account for efficiency losses within the system, including losses in the solar panels themselves.

Being an official moron, I would think the system would be lucky to be 50% efficient. So let's do some calculation of the economics of the system:

Half of 6kwh/m^2/day (on a clear day only ) = 3 kwh/m^2/day = 21 cents / m^2 /day at a rate of 7 cents per kwh which is about average in North America. If you have a large solar-electric system, you would have roughly 10 square metres of area of panels = roughly 3 metres by 3.333 metres = 10 feet by 11 feet of solar panels = an eye-sore on your roof, not even mentioning the wiring, the inverter, the battery storage bank, and the rotator--- the latter which will have to be adjusted constantly during the year to stay with the Sun. So you would need a ladder or steps built into your roof, but I won't even get into that eye sore.

At 50% efficiency on clear days without haze, without smoke, without dust, without high humidity, without morning and late afternoon fog which is the norm in southern California, and without bird poop on your solar panels, your system would produce 21 cents in power available to your house and a bit less available to the grid.

Now, let's say your system would cost $10,000 to install, wired, delivered, batteries, pv panels, rotator, inverter, labour, and assuming no-one fell off of your roof. Then you would capture $2.10 per clear day of electricity at 50% efficiency.

Now assume you have 200 clear days in southern California--- a region noted for an exceptional number of clear days, albeit with high stratus (ocean fog) in the early morning and with high stratus (ocean fog) in the evening, then your system would output 200 days/year x $2.10 = $ 420 per year. Therefore, your system would yield 4.2% per anum on its $10,000 outlay--- assuming no nonsense in govn't grants to distort the real world figures.

Of course, not every rainy day nor cloudy day during the rest of the year would have no hours of clear sky. But then again, not every clear day would have no hours of stratus fog. Not every clear day would be smoke-free, dust-free, high humidity- free, haze-free and so on... So I used 200 clear days as a reasonable figure for sunny southern California.

Is the system worth it? Especially, is the system worth it to the grid in your area? And remember that the output of the system is primarily at solar noon, and not at other times of the day when demand for power is greatest on the grid.

I used southern California as the best case scenario for solar power.

Starving Steve tells all --- like put down the pot-pipe, sober up, and get real. My source for solar information under the topic of solar insolation was the Wikipedia, last updated on Sept 12, 2011. The information is for sea-level locations worldwide, as an average. Low latitude locations would be better, and high latitude locations would be worse. Places like Florida with cloud cover and thunderstorms all day would be worse. Saudi-Arabia with daily dust, haze, and frequent dust storms would be worse. North-eastern Brazil might be better. England and NW Europe would be terrible, but southern Italy might be better. Western Australia would be better, but South-east Asia would be worse, etc.

And one more minor point: You would be darn lucky to install such a complex and large solar-electric system for $10,000. The batteries and a battery room alone might cost you $10,000..... But to a pot-head, everything is possible, even driving cars using solar power.

[dcarrigg]

Re: Solyndra

Thanks. I'm still confused as to whether or not this is the type arrangement EJ suggests in his recent book. Hopefully someone can sort it out.

Of course this is not the kind of arrangement that EJ was suggesting. This was a very simple thing. Assistant Secretary Zoi approves a bundle of loan packages to companies backed by the venture funds (including Solyndra) of President Obama's donors then runs out the door and grabs a job heading up a green energy fund with George Soros (with fantastic inside information as to what's bunk and what's not since everyone applied for these loans).

It's just like Halliburton receiving a 'no-bid' contract to provide meals for soldiers overseas, because we all know that nobody but an oil company can overcharge the government to feed people...it definitely had nothing to do with the personal investments of people in President George W. Bush's administration...right?

Of course, nobody did anything technically illegal here. Everyone is very good at obeying the letter of the law whilst trampling on its spirit.

Welcome to kleptocracy. Be thankful that the damage was in the millions and not the billions this time.

[Guest]

Re: Solyndra

The whole concept of solar-electric providing meaningful energy to the grid, and providing that energy at the time it is needed on the grid or in your house needs to be closely examined. Not just the endless grants for the industry and not just the corruption in the companies, but the entire theory of solar-electric needs to be critically examined from a workability point of view.

Let's begin: The Earth's average per day at sea-level on a perpendicular surface solar insolation is 6 kwh / m^2 (per day). This is for clear days only. So this sounds pretty good, like at a 7 cent per kwh electric rate, a 10 square metre solar-electric system might produce, if it was 100% efficient, 42 cents / m^2 / day in power on clear days.

But kiddies, here is the rub: Most places do not have many clear days. Then most places have humidity which attenuates the solar radiation. Then most places have dust or haze in the atmosphere, and especially in deserts. Southern California has dust, haze, humidity, and sometimes even smoke problems especially during fire season. But let's continue.....

To install this solar-electric system, to make it in any way practical in theory, you need at least 10 square metres of solar panels. Then you need a rotator to keep the panels perpendicular to the Sun's rays during the day. Then, you have to adjust the rotator for the seasons. Then the rotator needs energy to run. Then, you need a storage bank to store the the DC power. Then you need an inverter to convert the DC to AC at 60 cycles per second. Then you need to account for efficiency losses within the system, including losses in the solar panels themselves.

Being an official moron, I would think the system would be lucky to be 50% efficient. So let's do some calculation of the economics of the system:

Half of 6kwh/m^2/day (on a clear day only ) = 3 kwh/m^2/day = 21 cents / m^2 /day at a rate of 7 cents per kwh which is about average in North America. If you have a large solar-electric system, you would have roughly 10 square metres of area of panels = roughly 3 metres by 3.333 metres = 10 feet by 11 feet of solar panels = an eye-sore on your roof, not even mentioning the wiring, the inverter, the battery storage bank, and the rotator--- the latter which will have to be adjusted constantly during the year to stay with the Sun. So you would need a ladder or steps built into your roof, but I won't even get into that eye sore.

At 50% efficiency on clear days without haze, without smoke, without dust, without high humidity, without morning and late afternoon fog which is the norm in southern California, and without bird poop on your solar panels, your system would produce 21 cents in power available to your house and a bit less available to the grid.

Now, let's say your system would cost $10,000 to install, wired, delivered, batteries, pv panels, rotator, inverter, labour, and assuming no-one fell off of your roof. Then you would capture $2.10 per clear day of electricity at 50% efficiency.

Now assume you have 200 clear days in southern California--- a region noted for an exceptional number of clear days, albeit with high stratus (ocean fog) in the early morning and with high stratus (ocean fog) in the evening, then your system would output 200 days/year x $2.10 = $ 420 per year. Therefore, your system would yield 4.2% per anum on its $10,000 outlay--- assuming no nonsense in govn't grants to distort the real world figures.

Of course, not every rainy day nor cloudy day during the rest of the year would have no hours of clear sky. But then again, not every clear day would have no hours of stratus fog. Not every clear day would be smoke-free, dust-free, high humidity- free, haze-free and so on... So I used 200 clear days as a reasonable figure for sunny southern California.

Is the system worth it? Especially, is the system worth it to the grid in your area? And remember that the output of the system is primarily at solar noon, and not at other times of the day when demand for power is greatest on the grid.

I used southern California as the best case scenario for solar power.

Starving Steve tells all --- like put down the pot-pipe, sober up, and get real. My source for solar information under the topic of solar insolation was the Wikipedia, last updated on Sept 12, 2011. The information is for sea-level locations worldwide, as an average. Low latitude locations would be better, and high latitude locations would be worse. Places like Florida with cloud cover and thunderstorms all day would be worse. Saudi-Arabia with daily dust, haze, and frequent dust storms would be worse. North-eastern Brazil might be better. England and NW Europe would be terrible, but southern Italy might be better. Western Australia would be better, but South-east Asia would be worse, etc.

And one more minor point: You would be darn lucky to install such a complex and large solar-electric system for $10,000. The batteries and a battery room alone might cost you $10,000..... But to a pot-head, everything is possible, even driving cars using solar power.

Interesting analysis! It really puts it in perspective. It sounds like with current technology and current energy prices it isn't economical yet.

[Guest]

Re: Solyndra

Yes, this is of course a very questionable arrangement. I'm still unclear how EJ's proposed PPP differs in concept. Isn't any PPP then subject to political corruption?