solyndra
Obama with Solyndra execs (Getty)

Another hot topic at President Obama's news conference this week, despite his best efforts to focus on the jobs bill, was solar panel manufacturer Solyndra. Last month the company, which in 2009 received a $535 million federal loan, declared bankruptcy. Yet the president had emphatically lauded Solyndra as a model for government investment in clean energy, visiting its California headquarters as part of his 2010 "Main Street Tour."

Behind the scenes, administration officials were warned about the shaky standing of Solyndra, which made solar panels without silicon. The business floundered when silicon prices dropped sharply. Democratic members of the House energy subcommittee, which is now investigating the company's bankruptcy (along with another investigation by the Treasury Department inspector general into the Solyndra loan, and a fraud investigation into Solyndra by the FBI), released emails that showed the concern.

In a 2010 email to White House senior adviser Valerie Jarrett, Steve Westly, a former California state controller and green venture capitalist, wrote, "Many of us believe the company's cost structure will make it difficult for them to survive long term." A staffer from the Office of Management and Budget wrote that "bad days are coming."

A report by the Energy Department's inspector general cautioned that the agency hadn't fully developed regulations needed to manage the loan program -- created in 2005 under President George W. Bush -- that provided funds for Solyndra. The Obama administration, however, repeatedly downplayed the concerns.

Obama's Defense

At a White House press conference on Thursday, the president gave his explanation for supporting the company despite the alarms over its vetting and viability:

We knew from the start that the loan guarantee program was going to entail some risk, by definition ... The overall portfolio has been successful. It has allowed us to help companies, for example, start advanced battery manufacturing here in the United States. It's helped create jobs. There were going to be some companies that did not work out; Solyndra was one of them ... And of course there were going to be debates internally when you're dealing with something as complicated as this.

Asked whether his administration also ignored the warnings out of eagerness for his clean-energy "Win the Future" agenda to succeed, Obama insisted that was not a factor:

Even for those projects under this loan guarantee program that have ended up being successful, there are those in the marketplace who have been doubtful. So, I mean, there's always going to be a debate about whether this particular approach to this particular technology is going to be successful or not.  

All I can say is that the Department of Energy made these decisions based on their best judgment about what would make sense. And the nature of these programs are going to be ones in which for every success, there may be one that does not work out as well. But that's exactly what the loan guarantee program was designed by Congress to do -- was to take bets on these areas where we need to make sure that we're maintaining our lead.  

Solar Naysayers Take Aim

On the other hand, Rep. Cliff Stearns (R-Fla.), chair of the House oversight subcommittee investigating Solyndra, said last month that the company's downfall proves that "green energy isn't going to be the solution." Stearns has also argued that we can't compete with China when it comes to renewable energy because China puts far larger subsidies into it. He's not alone. In Solyndra's aftermath, there's growing sentiment that green energy -- and solar in particular -- is a doomed industry.

Majora Carter, president of the Majora Carter Group, a consultancy that specializes in green solutions, doesn't believe the sky is falling. "It's a little alarmist, to say the least, considering that solar is an industry that's certainly taking off in other parts of the world and even here," she told The Root, adding that Solyndra represented just 1.3 percent of the Energy Department's loan-guarantee program portfolio. "There are a lot of other U.S. solar companies that are doing just fine. Why are we not talking about the [federal loan] beneficiaries that did succeed?"

But even though advocates have been talking about the potential of solar energy to take off in this country for decades now, it still makes up only 0.1 percent of our energy consumption. If it were really viable for the United States, why are the numbers so microscopic?

"There's a big difference between talking about it and actually putting resources into it. We have not done that," said Carter. "Reagan could not have been more obvious about where he thought solar should be when he went into the White House and immediately uninstalled the panels that Jimmy Carter had installed there. That was an indication that there weren't going to be the kind of subsidies and support, and research and development, need to go into that industry.

"We haven't been putting serious resources into it now, either. Instead it's been going into oil, gas and coal. It's just not a real comparison. The assumption is that all things are equal, and they clearly are not. The playing field is not level."

Carter is equally dismissive of the idea that we can't compete with China. "There's something to be said about a whole bunch of folks always being able to do it cheaper," she conceded. "But I don't think we should just throw in the towel. Whatever happened to American ingenuity and developing our own market share? We've done it with pretty much everything, and there's no reason why we can't do it. What we haven't done is make the investments in R&D to actually do something -- and maybe even do it better."

Cynthia Gordy is The Root's Washington reporter.