Just as it has in the Financial marketplace ("this company, we help. This one, we let die"), Big Government is starting to decide which are the winners and which are the losers. Is it right? Is it fair? Doesn’t matter – it’s still our money….sigh.
Solar power struggles: DayStar warns, OptiSolar closes
Two young solar companies–DayStar Technologies and OptiSolar–have indicated that they’re on shaky financial footing, signs that a shake-out among solar power companies has begun.
On Friday, DayStar Technologies said that it has issued a "going concern" statement as part of its annual filing with the Securities and Exchange Commission. The Halfmoon, N.Y.-based company had a net loss of $26 million in 2008…
Meanwhile, Hayward, Calif.-based OptiSolar said last week that it has closed its solar cell manufacturing plant and is laying off 200 employees, according to reports. Late last year, it cut its staff in half and warned that it would need more capital to continue operating.
…Faced with both the economic slowdown and conservative lending, development-stage green-tech companies have had trouble getting the large amount of capital needed to expand.
Venture capitalists had poured millions of dollars into dozens of new solar companies, a situation that many people expected would lead to failed companies.
Meanwhile, an anticipated drop in silicon prices is expected to push the cost-per-watt of solar power lower, creating brutal price competition among cell and panel providers.
Energy Dept. delivers solar loan to Solyndra
Demonstrating that it plans to act quickly with clean-energy loans, the U.S. Department of Energy has made $535 million available to solar start-up Solyndra.
The loan guarantee, announced on Friday, is the first to be approved by the Department of Energy in four years. As part of a broader government stimulus plan, the administration of Energy Secretary Steven Chu has committed to quickly disbursing loans to clean-energy companies.
For Solyndra, the loan will partially finance construction of a second factory in California. The 4-year-old company, based in Fremont, Calif., has designed cylinder-shaped solar cells that are assembled onto arrays for the flat roofs of corporate and industrial buildings.
…For Solyndra, the loan allows the company to ramp up more quickly and reduce the cost of the solar power its product produces. The plant is set to employ about 1,000 people, once operating, and employ 3,000 people in its construction.
To the broader green-tech industry, the Energy Department loan is an encouraging sign. Several green technologies have been developed over the past five years, but a number of companies are struggling to get the financing available to scale up their operations and sales.
The problem is, will it really be winner? Or are we delaying the inevitable? We may never know! Would DayStar and OptiSolar have made it if they had received bailout money? Would they have survived and prospered? Solyndra gets a lifeline for their competetive marketplace – without the loan would they have gone under too? With their continued existence, is capital that has been given to them have been better served by going to another?
The element of risk, vis-a-vis the typical Venture Capital model, is put aside. No financial arrangements were mentioned but was the loan at below marketplace rates for "bailout purposes"? If so, the Government has distorted the marketplace with a one-two, as Solyndra may now be able to compete on a tilted play field.
Who knows? My problem is that I do not really want my taxpayer money taking the place of Venture Capital or other private sector funding where risk is an everyday and known quantity. It is not in the realm of Government.
It is one thing if I put MY money at risk; it should be scaring EVERYONE that the Government is putting YOUR money at risk – and you have no say-so at all!
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