Of all the currently viable clean
energy
solutions, solar power makes the most sense. Unlike hydroelectric
dams, solar plants don't disrupt the flow of rivers and uproot
ecosystems and can be located safely in urban areas (some types of
plants do use a lot of water). Nuclear power is efficient but
mining uranium is a dirty
business
, while the challenges of making the plants 100 percent safe and
storing the waste have not yet been solved (the worst solar
radiation has ever done is give people sunburns). Wind power is
even more expensive and more variable than solar, while
natural
gas
, often listed alongside these technologies because it burns
cleaner than coal and
oil
, is dangerous and dirty to extract.
For advocates of green energy, the last few months have been
disastrous. Solyndra, one of the larger and more prominent solar
companies in the U.S., went bankrupt and shut down at the end of
August after receiving a federally guaranteed $528 million
loan
from the Department of Energy. In 2009, many in the administration
hailed the deal as a major victory for solar power and U.S. energy
independence. Steven Chu, the Secretary of Energy, said at the 2009
groundbreaking
ceremony that the department was "moving with unprecedented
speed to help create new jobs that can't be outsourced and to help
America's most promising companies grow."
Conservatives, along with the oil and coal industry, have seized on
the federal loan and Solyndra's failure as a perfect political
weakpoint, allowing them to slam both green energy and a Democratic
administration for crony capitalism. Certainly, the deal looks bad
politically and didn't do the U.S. taxpayers'
balance sheet
any favors.
Consider, though, the cost of the Iraq war: $800 billion thus far,
but north of $4 trillion in the long term, according to the
Christian Science Monitor
, which is more than World War II. Iraqi oil production, meanwhile,
rose to 2.6 million barrels per day in the last year, says
CNN
. That comes out to approximately $95 billion annually at current
oil prices
of $100/barrel - so if every cent of that oil money was somehow
applied to U.S. finances (hint: it's not) it would be paid down
in....42 years.
That might be a (slightly) facetious calculation, but it puts some
perspective on the Solyndra deal. It's been a bad year for solar
companies in general, as plummeting solar panel prices battered
major producers. The biggest and most stable publicly-traded U.S.
solar firm, First Solar (
FSLR
), is down 66 percent on the year and 75 percent down from February
highs of $165 per
share
. Similarly, China's Trina Solar (
TSL
) lost 70 percent of its share value from January and JA Solar (
JASO
) is down 80 percent to just $1.63 per share.
Solar companies crashed because panel prices plummeted - and those
fell largely because cash-strapped governments pulled support for
the
technology
, both in terms of consumer rebates and funding for major
installations. Manufacturing photovoltaic panels is a major,
capital
-intensive process, and companies simply overproduced and then
watched as the bottom fell out of the market. In addition, China
exerts an outsize effect on the
sector
, as its leadership looks to dominate clean energy industries in
the
long-term
, post-petroleum future. The Chinese government is perfectly
willing and able to pour large sums of money into solar panel and
wind turbine manufacturing, knowing that what it loses in the short
term may well get clawed back when oil becomes terribly scarce.
Combined with a weak housing market (it's tough to
put
solar panels on a rental), all these factors torpedoed a promising
market. Lending Solyndra $500 million was probably a dumb idea (I'd
have given it to First Solar, which was better at containing
production costs and has a more promising technology). But it was
the right kind of dumb idea, and China's willingness to back their
own solar manufacturing titans will almost certainly pay off in the
long game.