(WASHINGTON) -- Two weeks ago, an American solar company declared bankruptcy. It was one of three U.S. solar companies to go under in a month, but this one was special.
Solyndra, the solar panel manufacturer, risked losing as much as $528 million in taxpayer money the day it shuttered its Freemont, Calif., factory and is now calling into question the integrity of the government’s loan guarantee program for renewable energies.
But while the evidence continues to prove that gambling millions in taxpayer money on a company that made just $3 for a product that took $7 to produce was rather unwise, it doesn’t look like the one bad apple has ruined the whole orchard of green energy investments.
“I think renewable energy remains one of the best long-term investments one can make as long as you’re careful to pick your companies,” said Garvin Jabusch, chief investment officer at Green Alpha Advisers, which focuses on environmentally sustainable investments. “If some companies go bankrupt, this is just normal capitalism.”
The Solyndra bankruptcy has inspired an investigation from the House Energy Committee, whose chairman Fred Upton (R-Mich.) said was a “classic case of fraud and abuse and waste.”
But the Energy Department argues the bankruptcy is not emblematic of the entire loan program. The solar company loan represents about 1.3 percent of the entire loan guarantee program, which was a $2.4 billion initiative created under the 2009 Recovery Act to support the new green technology investments, which can be risky. Under the program, the government does not actually pay out any money, but guarantees that if the company fails, the Treasury will repay the private loan.
“What this program is intended to do is leverage private sector capital towards innovative clean energy technology that can help American manufacturing remain competitive, but might not otherwise receive project financing on the open market,” said Damien LaVera, a spokesman for the Energy Department. “Congress recognized that investing in innovative tech carries intrinsic amount of risk.”
The Solyndra bankruptcy is not symptomatic of the entire solar industry either, Jabusch said. According to the Solar Energy Industries Association, the solar market nearly doubled from 2009 to 2010 and is anticipated to add about 24,000 jobs, a 26 percent increase, over the next year.
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