Tuesday, November 22, 2011
I think it is a combination of both. Whatever set of words you choose, the Federal government’s investment in Solyandra fits one word - FIASCO.
As early as 2007 or 2008 even a novice would have had some doubts about the competitiveness of Solyandra’s solar tubes. At that time, it was obvious that no one could compete price wise with Chinese solar panels. Remember this was a start-up company moving into a highly competitive market place, one that was basically controlled by the Chinese.
Even back in 2008 it was becoming clear that silicon prices were about to fall dramatically. Development of larger wafers further cut costs. Importantly, American labor costs applied to solar panels manufacture could not, and still cannot, compete with Chinese costs. So, what happened to the Solyndra loan guarantee application?
Solyndra must have furnished a detailed business plan when they applied for a government loan guarantee. What government bureaucrat accepted the documents? Who analyzed them? Was it a team effort? Were the analysts business-oriented? What conclusions did they draw? I am still perplexed by the voluminous 80,000+ pages that were manufactured by bureaucrats, most of whom had never been involved in private business. Yes, it was a FIASCO. First of all, a comprehensive business plan does not have to be a very thick document. Nor, does an analysis of this project require more than a 40 or 50 pages of text and several operation, financial, and marketing projections based on a couple of sets of criteria. . During the years when I was an engineering consultant, the staff was always cautioned about the fact that the report was not graded on its weight, but on its content. In fact, in the case of Solyundra, just a focused cursory look at the Chinese market would have put a nail in the coffin.
My observations are not hindsight, or Monday morning quarterbacking. My book – The Sky Will NOT Fall – Unmasking the Green Revolution – gives a general analysis of the solar market in about half-a-dozen pages. It does not even mention cylindrical panels, but the book does point out that solar energy is still questionable economically. Yes, even using the low-cost Chinese panels. The use of cylindrical panels is obviously not competitive cost-wise, especially if no real cost controls are in place.
The management of Solyndra spared no cost in any phase of their project. They made certain that their facility was a showcase of vast proportions. Their main concern was to be sure company offices and board rooms were extra-luxurious. They succeeded. To please the senses of worker’s robots on the assembly line whistled Disney tunes when they moved. Spa-like showers with liquid-crystal displays showed the water temperature. There were glass-walled conference rooms to sooth the stressful strain of management meetings. Extravagance after extravagance was procured as the norm in every facet of the operation. None of these lavish outlays seemed to have rung a bell with the government analysts?
I thought I had completed this BLOG, but the politicians gave me no choice. I decided I had no choice but to add another paragraph on Solyndra’s never-ending saga. Unbelievable, Solyndra employees are receiving terminal pay. I regard it as a bonus! Yes, we lucky taxpayers are being saddled with $12,300,000, which will be split 1100 ways. Wow, Solyndra goes broke and has to lay off 100% of its employees, and they receive $11,181.32 apiece in terminal pay, plus unemployment benefits. Need I say more – FIASCO.