U.S. President Barack Obama holds a newly manufactured light as he tours Orion Energy Systems, a power technology company, as part of his Administration’s White House to Main Street Tour, in Manitowoc, Wisconsin.
(2 of 4)
While the U.S. dabbled in loan guarantees for solar firms--a half-billion dollars here, a billion dollars there--China's government catapulted its own industry forward with overwhelming force and far more cash. In 2010 alone, Beijing plowed $30 billion in credit into its solar industry, about 20 times more than the U.S. investment. Global prices for silicon-based solar panels, meanwhile, collapsed, effectively pricing Solyndra's fancy nonsilicon design out of the market.
The Chinese understood something that was clear to energy experts in the U.S. "The race for solar manufacturing is a race worth winning," says Jonathan Silver, a former hedge-fund executive who now oversees the Department of Energy's loan programs. "Over the next few decades, this will become a global market worth trillions of dollars."
Right now, no one can argue that the U.S. is ahead. China occupies 54% of the global solar technology market, up from 6% in 2005. By contrast, the U.S. share has declined from 42% in 1997 to just 6% today.
It was the Republican Party that first tried to close this gap. The 2005 Energy Policy Act, passed by a GOP Congress and signed by President George W. Bush, was meant to be America's answer to China's state-sponsored energy innovation. It created a loan-guarantee program with the goal of investing in "high-technology-risk" clean energy, including nuclear, solar and wind. Obama and Democratic lawmakers expanded it in 2009 and boasted of its potential.
At first, the Obama White House moved quickly. Desperate to spur the reeling economy and rack up winning photo ops, Administration officials fought to cut red tape and expedite loans to companies like Solyndra. "We had to knock down some barriers standing in the way to get these projects funded," admitted Matt Rogers, the Energy Department official who oversaw the program at the time.
As a result, many of those companies, including Solyndra, received loan commitments before the government had gathered all the information about applicants that it normally would demand. E-mails recently released by congressional investigators show that some bureaucrats sharply questioned the speed of the fast-moving Solyndra loan. "This deal is NOT ready for prime time," one White House budget analyst wrote in March 2009, just nine days before the loan was announced.
At the same time, the White House permitted at least the appearance of political back-scratching. The same week the loan was approved by a key Energy Department committee and the company's board, senior Obama aides met at the White House with Kaiser, the Tulsa, Okla., billionaire who was Solyndra's biggest investor--and a campaign donor who raised at least $50,000 for Obama in 2008. On March 12, Kaiser met privately with three senior officials, including Pete Rouse, one of Obama's closest confidants. An Administration official tells TIME that Solyndra was not discussed at the meetings, which focused on Kaiser's charitable efforts.
Officially, the urgency was about one all-important thing: jobs. "We have to make sure that as we create these jobs, we create jobs of the future, like the ones you are creating ... jobs that can serve as a foundation for a stronger American economy," Vice President Joe Biden said at the groundbreaking ceremony for Solyndra's factory on Sept. 4, 2009.