Solyndra Bankruptcy Could Dry Up Solar Industry Funding
FREMONT (KCBS) – While many venture capitalists remain bullish about solar companies, a Republican call for further investigation of how bankrupt Solyndra spent millions in federal loans could mean less public money for the solar industry.
In February, the House Energy and Commerce Committee looked into how Solyndra won approval in 2009 for a $535 million Department of Energy loan guarantee. That investigation focused on one of the company’s investors, George Kaiser, who contributor to President Barack Obama’s campaign.
Energy Department officials said the company’s application was carefully vetted, and pointed out that investing in startup companies always carries risk.
Robert Kaplan, a Harvard Business School professor and former vice chair of Goldman Sachs, said the Solyndra case was an example of why government money might be better spent on things private industry won’t support.
“Unfortunately when something like this happens, rightly or wrongly, it tends to discredit the thought of any government involvement in anything,” he said.
KCBS’ Holly Quan Reports On The Political Fallout:
Solyndra also went through than $1 billion in venture capital over the last five years, reportedly from investors such as Richard Branson and the heirs to the Wal-Mart empire.
Russell Hancock, CEO of Joint Venture Silicon Valley, said his confidence in the solar industry was unshaken.
“There are still many companies that are competitive in this Valley, Sun Power and Westinghouse Solar among them,” he said.
Such enthusiasm aside, the demise of the Fremont manufacturer could slow to a trickle the flow of venture money to solar companies in the short term, said Rob Pomeroy, CEO of Horizon Technology Finance which invests in tech firms.
“With lots of money invested, it’s a setback. It’s not the end of the solar industry, or the end of green tech or anything else. It’s that this particular company raised a lot of money and had a product that couldn’t compete,” he said.
KCBS’ Mike Colgan Reports On Job Retraining Efforts:
Fremont Mayor Bob Wasserman said the city still had faith in the long term health of the solar industry, pointing to the recent expansion by Solaria.
“We think that the solar industry is still growing. And we think that we can offer a lot to companies to locate here,” he said.
Wasserman said some of the 1,100 workers who lost their jobs when Solyndra abruptly suspended operations Wednesday would be eligible to participate in the job re-training program set up when the New United Motor Manufacturing plant closed in 2010.
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