Solar power firm goes bankrupt after receiving millions of taxpayer dollars

From the Boston Herald, a look at what happens when the government redistributes wealth based on political correctness.

Excerpt:

Evergreen Solar Inc., the Massachusetts clean-energy company that received millions in state subsidies from the Patrick administration for an ill-fated Bay State factory, has filed for bankruptcy, listing $485.6 million in debt.

Evergreen, which closed its taxpayer-supported Devens factory in March and cut 800 jobs, has been trying to rework its debt for months. The cash-strapped company announced today has sought a reorganization in U.S. Bankruptcy Court in Delaware and reached a deal with certain note holders to restructure its debt and auction off assets.

The Massachusetts Republican Party called the Patrick administration’s $58 million financial aid package, which supported Evergreen’s $450 million factory, a “waste” of money.

“The bankruptcy of Evergreen Solar is another sad event for the Massachusetts company and highlights the folly of the Patrick-Murray Administration which has put government subsidies into their pet projects instead of offering broad based relief to all Bay State employers,” said Jennifer Nassour, head of the state GOP.

Here’s a previous story about another solar-power boondoggle, from the Daily Caller.

Excerpt:

Solyndra, Inc. was supposed to have showcased the effectiveness of the Obama administration’s stimulus and green jobs initiatives, but instead it has become the center of congressional attention for waste, fraud and abuse of such programs.

According to a Feb. 17 letter signed by Energy and Commerce Committee Chairman Fred Upton, Michigan Republican, and Oversight Subcommittee Chairman Cliff Stearns, Florida Republican, to Energy Secretary Steven Chu, the Fremont, Calif.-based solar panel manufacturer should never have received a $535 million loan guarantee from the stimulus.*

The company became the first recipient of an Energy Department loan guarantee under the stimulus in March 2009, which was intended to “finance construction of the first phase of the company’s new manufacturing facility” for photovoltaic solar panels.

The Energy Department estimated in a March 20, 2009 press release that the loan guarantee would create 3,000 construction jobs and a further 1,000 jobs after the plant opened.

And President Barack Obama and Vice President Joseph Biden each personally showcased Solyndra as an example of how stimulus dollars were at work creating jobs, during appearances at the company over the course of the following year.

Biden personally announced the closure of Solyndra’s $535 million loan guarantee in a Sept. 9, 2009 speech, delivered via closed-circuit television, on the occasion of the groundbreaking of the plant.

The vice president justified the federal government’s investment in Solyndra in front of employees and other dignitaries, including Secretary Chu and former Calif. Gov. Arnold Schwartzenegger, saying the jobs the company intended to create would “serve as a foundation for a stronger American economy.”

“These jobs are the jobs that are going to define the 21st century that will allow America to compete and to lead like we did in the 20th century,” Biden said.

According to Biden’s speech, the $535 million loan guarantee was a smaller part of the $30 billion of stimulus money the administration planned to spend as part of its Green Jobs Initiative.

Obama made similar claims in a May 26, 2010 speech at the plant, but the 1,000 jobs he and Biden touted in their respective speeches failed to materialize.

Instead, Solyndra announced on Nov. 3 it planned to postpone expanding the plant, which put the taxpayers on the hook to the tune of $390.5 million taxpayers**, or 73 percent of the total loan guarantee, according to the Wall Street Journal.

It also announced that it no longer planned to hire the 1,000 workers that Obama and Biden had touted in their speeches and that it planned to close one of its older factories and planned to lay-off 135 temporary or contract workers and 40 full-time employees.

A closer look at the company shows it has never turned a profit since it was founded in 2005, according to its Securities and Exchange Commission (SEC) filings.

And Solyndra’s auditor declared that “the company has suffered recurring losses, negative cash flows since inception and has a net stockholders’ deficit that, among other factors, [that] raise substantial doubt about its ability to continue as a growing concern” in a March 2010 amendment to its SEC registration statement.

“While we understand the purpose of the Loan Guarantee Program is to help private companies engaging in clean energy products to obtain financing by providing loan guarantees, subsequent events raise questions about Solyndra was the right candidate to receive a loan guarantee in excess of half a billion dollars,” Upton and Stearns wrote.

A June 2010 Wall Street Journal report indicating that Solyndra’s majority owner, Oklahoma billionaire George Kaiser, was a major fundraiser for the 2008 Obama-Biden campaign has stimulus opponents such as Citizens Against Government Waste crying foul.

Even the radically left-wing Huffington Post is getting the picture, in this article entitled “The Party’s Over for Big Wind“.

Excerpt:

Here’s the reality: the backlash against industrial wind is real, it’s global, and it’s growing. The U.S. has about 170 anti-wind groups. AWEA doesn’t want you to know that a number of towns in New York state have prohibited the construction of industrial wind turbines. In April, the town of Falmouth, Massachusetts enacted a year-long moratorium on construction of new wind turbines. And earlier this month, a pair of environmental groups in Massachusetts called for a ban on new turbines in the state until more work is done on the health effects of wind turbine noise.

The wind lobby is desperate to downplay the problem of infrasound from wind turbines. But this month, in a peer-reviewed article in the Bulletin of Science, Technology & Society, Carl V. Phillips, a Harvard-trained PhD, concludes that there is “overwhelming evidence that wind turbines cause serious health problems in nearby residents, usually stress-disorder type diseases, at a nontrivial rate.”

The subsidies for wind energy are in peril. A recent report from the Energy Information Administration shows that in 2010, the wind energy sector got more federal subsidies than any other energy sector other than biofuels. The report found that wind energy got a total of $4.986 billion in subsidies, or nearly twice as much as was given to the oil and gas sector, which got $2.82 billion. The majority of the wind energy money came from the federal stimulus package passed in 2009. But much of that stimulus money has been spent.

Last December, AWEA cheered after Congress approved a tax bill that included a one-year extension of the investment tax credit for renewable energy. But another high-profile renewable energy subsidy, the tax credit for the corn ethanol scam, is due to expire at the end of this year. And given that Republicans in Washington are eager to cut all types of federal spending, the investment tax credit is likely to, once again, be in legislators’ cross hairs.

Bode was right a year ago when she said the wind industry is in distress. Her industry’s still in peril today because it cannot survive without mandates and taxpayer subsidies. And unless or until it can, she cannot expect any sympathy from cash-strapped voters.

Why are we wasting money on unproven technologies? Do we have money to waste on old-time religion?

One thought on “Solar power firm goes bankrupt after receiving millions of taxpayer dollars”

  1. Are you really asking why “waste” money on exploring new technologies? There are huge problems with the old technologies in this arena…and surprise, nobody wants them in their backyards either so to make the claim, even if indirectly, that it’s a new problem with new technologies is ludicrous. If the government didn’t subsidize cutting edge technologies who would? A capitalist market favors proven technologies that are known to make money, hence you have little if any advancement in terms of newer technologies…add on top of that there are huge lobbies against these (or almost any new) technologies (right or wrong) as it will greatly impact the existing industries profit margins.

    We’ve already seen the weaknesses associated with nuclear both here and in Japan and Russia. No country has found a solution to the nuclear waste produced and most countries, the USA in particular, have to keep lowering the safetly standards to keep the existing nuclear plants in operation.

    Coal is produces tons of pollution (CO2 and mercury) every day. These pollutants have other serious side affects such as serious health issues and chronic medical problems. Add on top of that we’ve had to resort to stripping entire mountains in W. Virginia to continue our consumption at the current levels. This can only go on so long and it severely pollutes all of the local watersheds.

    Natural gas isn’t bad but it’s a resource in my mind that’s best left to heat homes. This too requires a huge dependence on foreign suppliers, namely the middle east. Fracking requires huge (tens of millions) quantities of water where a portion of that becomes polluted and completely unusable. It uses chemicals that are proprietary and injected in to the ground rendering that area’s water supply almost completely unusable. Add on top of that, there are 48 oil producing countries and 33 have already reached peak oil. Many of the remaining countries are neither open nor opaque about their reserves so it would be foolish to base our entire energy policy on this.

    So yes, we should be exploring all possible new forms of energy production that we can find as our current ones have limits (some more than others)

    Like

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