Lights go dim on another energy project – Washington Times

Official portrait of United States Department ...

Official portrait of United States Department of Energy Secretary Steven Chu. (Photo credit: Wikipedia)

Lights go dim on another energy project – Washington Times.

Geothermal losses pile up

By Chuck Neubauer – The Washington Times

A geothermal energy company with a $98.5 million loan guarantee from the Obama administration for an alternative energy project in Nevada – which received hearty endorsements from Energy Secretary Steven Chu and Senate Majority Leader Harry Reid – faces financial problems, and the company’s auditors have questioned whether it can stay in business.

Much like Solyndra LLC, a California solar-panel manufacturer with a $535 million federal loan guarantee that went bankrupt, Nevada Geothermal Power (NGP) has incurred $98 million in net losses over the past several years, has substantial debts and does not generate enough cash from its current operations after debt-service costs, an internal audit said.

“The company’s ability to continue as a going concern is dependent on its available cash and its ability to continue to raise funds to support corporate operations and the development of other properties,” NGP auditors said in a financial statement for the period ending March 31.

“Consequently, material uncertainties exist which cast significant doubt upon the company’s ability to continue as a going concern,” the statement said.

Mr. Reid, a Nevada Democrat who led passage of the $814 billion stimulus bill and worked to include the loan guarantee program to help finance clean-energy projects, predicted in 2010 that NGP would “put Nevadans to work” and declared that Nevada was the “Saudi Arabia of geothermal energy.”

Mr. Chu celebrated NGP’s potential in his June 2010 announcement of the loan guarantee, saying the federal government’s support of the company demonstrated its commitment to geothermal power to achieve the nation’s clean-energy goals.

But Rep. Jim Jordan, Ohio Republican and chairman of the House Oversight and Government Reform subcommittee on regulatory affairs, stimulus oversight and government spending, is concerned about NGP’s finances and the timing of the loan guarantee.

“The company was in danger of defaulting on its financial obligation, and the [Department of Energy‘s] assistance served as a de facto bailout,” Mr. Jordan said. “After receiving a taxpayer-backed $98.5 million loan guarantee, the company is still struggling.”

He said the loan guarantee “essentially served to prop up an already-faltering firm.”

In January, Rep. Darrell E. Issa, California Republican andchairman of the House Oversight and Government Reform Committee, told Mr. Chu that the NGP loan guarantee raised questions about why the Energy Department was investing significant taxpayer resources in a company with well-established financial problems.

‘Save the failing company’

At the time the Energy Department announced its conditional approval of the guarantee, Mr. Issa said NGP would have defaulted on a loan from TCW Asset Management Co., then its primary lender, “had DOE not swooped in to save the failing company with taxpayer money.”

A committee report said the loan did not finance any new construction and “did not help to create a single job.”

During a House hearing in May, Rep. Frank C. Guinta, New Hampshire Republican, asked why NGP needed a government loan in 2010 just a year after it had received financing to get its plant up and running. He said it didn’t sound like a loan but a bailout.

“I don’t see it’s a good practice for the Department of Energy to use taxpayer-subsidized loans to provide to an entity that already has an existing facility,” he said.

Mr. Jordan said the Energy Department handed out more than 20 loan guarantees to companies with an average credit rating of BB-, or “junk status,” meaning they were vulnerable to default if economic or business conditions changed. NPG was rated BB+, which is considered speculative or junk and a step below investment grade.

Mr. Jordan and Mr. Issa have questioned why taxpayer money was “put at such risk.”

Brian D. Fairbank, president and CEO of NGP, defended the company by saying its auditors were required to list all risks the firm faced because its stock is traded publicly. But, he said, NGP is making its payments on its federally backed loan.

“The loan is in good shape. The loan is fully supported,” he said, noting that the federally guaranteed loan went to an NGP subsidiary known as NGP Blue Mountain 1, for which he also serves as president and CEO.

The Energy Department guaranteed nearly $79 million, or 80 percent of the $98.5 million loan, financed in 2010 by John Hancock Financial Services. The loan is secured by assets from Blue Mountain 1 and gets paid from revenues generated by a 20-year power purchase agreement with NV Energy (formerly Nevada Power Co.).

“There is no question we benefited from the loan guarantee,” said Mr. Fairbank, adding that it helped them get the Hancock loan 4.14 percent compared with the 14 percent interest rate the company was paying on its existing debt with another lender.

Another loan

Mr. Fairbank acknowledged that NGP is not current on a separate high-interest $88.4 million loan from a Washington investment firm, which is not backed by the federal government and is subordinate to the federal guaranteed loan – meaning John Hancock and the Energy Department have first claim on Blue Mountain’s assets and earnings in a default.

JohnMcIlveen, a stock analyst at Toronto-based Jacob Securities Inc. who monitors NPG, said he did not think the federally guaranteed loan was in trouble because it “holds all the cards.” But he said he did not see the subordinate lender “getting out whole.”

He said Blue Mountain 1 is not producing as much energy as the company had hoped and needs $20 million to help increase its capacity, which could be difficult to raise.

Energy Department spokesman Dan Leistikow defended the loan guarantee by saying NGP was continuing to make its loan payments “on time and in full.”

Mr. Reid’s spokeswoman Kristen Orthman said NGP has received bipartisan support because “programs and incentives for clean energy have helped create jobs and make Nevada a growing leader in geothermal energy production.”

Mr. Fairbank denied knowing or lobbying Mr. Reid, but the House Oversight Committee said Ormat Inc., which was paid $80 million to build NGP’s Blue Mountain plant, has “strong ties” to the senator. It said two former Reid staffers, Kai Anderson and Paul Thomsen, work for Ormat.

NGP said it will hold its annual shareholders meeting July 24 in Vancouver, British Columbia, during which Mr. Fairbank is expected to discuss the firm’s debts, a recapitalization plan and steps that have been taken to reduce operating costs, including ending its registration and over-the-counter listings in the United States to eliminate the costs of Securities and Exchange Commission reporting requirements.

Much like NGP, Mr. Chu praised Solyndra after the company was awarded its $535 million federal loan guarantee, but two years later it filed for bankruptcy. It remains the focus of a criminal investigation by the Justice Department.

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Word to Obama: Solar Still Sucks – John Ransom – Townhall Finance Conservative Columnists and Financial Commentary

Word to Obama: Solar Still Sucks – John Ransom – Townhall Finance Conservative Columnists and Financial Commentary.

If you thought solar sucked last week, it sucks even more now that Solar Trust of America has filed for bankruptcy. The name is kind of fitting in the ironic and Orwellian fashion we’ve come to expect from the Obama administration. The name symbolizes the bankruptcy of Obama’s energy policy: solar… trust… America.  Oxymoron, with the emphasis on moron. If it weren’t this close {ß}to being a tragedy, we could all laugh.

“Solar Trust of America LLC, which holds the development rights for the world’s largest solar power project,” reports Reuters, “on Monday filed for bankruptcy protection after its majority owner began insolvency proceedings in Germany.”

Obama critics contend that solar is just another part of his failed energy policy. But they would be overlooking the benefits to America’s energy security that Obama believes photo-ops bring us.   

Because the bankruptcy is just another one of the Obama administration’s cash-for-photo-op investments that has crashed and burned. Most politicians charge big contributors money for photo-op with the president.

Below: California Governor Jerry Brown & Obama’s Secretary of the Interior, Ken Salazar, break ground on the a project from Solar Trust of America that’s now in jeopardy because Solar Trust has filed bankruptcy. And yes, those are golden shovels they are using.   

In another quest to fundamentally change America, Obama awards government loan guarantees along with photo-ops to big donors.  

So fortunately for America’s national security- and energy security we will now at least always have the memories- backed up by various action photos suitable for framing.

Although the Department of Energy was eager to approve the Solar Trust for $2 billion worth of government loan guarantees, the company rejected the offer in a scramble to find technology that would actually allow their plant to work. Its amazing that at the time the Department of Energy was pushing a loan to the company, the company was realizing the equipment on which the loan was predicated wouldn’t work.  

Once billed as the brain trust behind one of the largest solar projects ever- the Blythe Solar Power Project in California’s Coachella Valley- Solar Trust of America will end its government-sponsored Gong Show appearance with the tinny reverberation of failure that will echo for the whole industry.

“The Oakland-based company has held rights for the 1,000-megawatt Blythe Solar Power Project in the southern California desert,” writes Reuters, “which last April won a conditional commitment for a $2.1 billion loan guarantee from the U.S. Department of Energy. It is unclear how the bankruptcy will affect that project. Solar Trust did not receive the loan guarantee.”

While Obama administration was denied the opportunity to throw money at Solar Trust- only by the grace of the company’s own good judgment- make no mistake, Obama’s policy of throwing money at other of these uneconomic, sunshine and blue sky investments, is responsible for the bankruptcy as much as any other factor; actually, probably more so.

So far, the administration has made $34 billion in loan guarantees to various green energy projects, many of them in a solar industry already rocked by over-supply and poor economics.

What solar needs now is fewer start-ups, less investment, not more. And everyone outside of the government central-failures understands this. The more money that’s been thrown at solar, the smaller the industry has become.

Guggenheim Solar (Stock Symbol: TAN), an exchange-traded fund that roughly follows the MAC Global Solar Energy Index, representative of broader trends in solar, has lost close to 62 percent of its value year-to-date. Over a three year period, the fund has lost roughly 16 percent while the S&P 500 has returned around 25 percent. All this, at a time when government support and subsidies for the solar industry was at record levels. In 2008 TAN approached $300 per share. It now trades at $23.07.

TAN Chart

TAN data by YCharts

Wall Street seems to know what the government can’t figure out for itself: Solar still sucks, investment-wise. That’s not going to change until the fundamental problem of creating electricity from the sun’s radiation at economical prices is solved. If there is a government role in that solution, it would be in putting money- a lot less money- into basic research that solves the economic problem, not funding private investment.

Because, once solar can compete with nuclear and natural gas and coal, then hurray for solar!

Until then, however, the government, try as it might, won’t be able to bridge the gap between free market -or black market- solutions and central planning schemes no matter the level of subsidy support, the number of loan guarantees or the imposition of fees on competing energy sources in order to make solar more attractive to consumers.

It’s ironic that at a time the Obama administration is twisting the Constitution in order to nationalize healthcare in the name of controlling runaway healthcare prices that they are simultaneously pursing policies in another huge part of our economy, which, of their own admission, have made energy prices “necessarily skyrocket.”

As has been proven by Obama’s most recent photo-op-as-energy policy strategy regarding the Keystone Pipeline, these policies don’t add up to only economic failure for the administration, but to the only failure that Obama really seems to care about: political failure.

But it’s nice to see that finally, in something, Obama, in my most insincere imitation of Bill Clinton, “feels our pain.”

Let’s make him feel it in November when it’s colder outside and we get more record cold via, um, global warming.      

The Year Solar Goes Bankrupt – John Ransom – Townhall Finance Conservative Columnists and Financial Commentary

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The Year Solar Goes Bankrupt – John Ransom – Townhall Finance Conservative Columnists and Financial Commentary.

Get ready for a new round of green bankruptcies, as Europe trims back subsidies for solar companies and taxpayers lose their appetite for subsidizing green power.

“The mini-bubble resulting from the rush to cash in on solar subsidies in European and U.S. markets is ending, as feed-in tariffs drop in Europe while loan guarantee and tax credit programs tighten up in the U.S.,” says a new report from Bank of America Merrill Lynch according to CNBC.com.

Germany is dialing back subsidies for solar this month by 29 percent with subsequent decreases each month, according to Bloomberg.com.

Rasmussen has recently released a survey of voters that show a diminishing number of voters support subsidizing the production of the Chevy Volt.

Only 29 percent of likely voters agree with Obama’s latest proposal to include a $10,000 subsidy in the federal budget to support the purchase of every electric vehicle.

The survey found that 58 percent oppose the plan, while 13 percent remain undecided.



And make no mistake, without subsidies solar, electric vehicles, wind power and other alternatives remain a chimera.      

 “Steven Cortes, CNBC contributor and founder of Veracruz Research, also sees solar stocks declining further and wonders about the impact of the recent natural gas boom on the sector.

“’As much as I love sun, I hate the solar space. This is not a real business, it’s a political construct,’” Cortes said on Fast Money Wednesday. “’And they can’t compete with natural gas at these levels.’”

According to the Associated Press the U.S. now has 2.433 trillion cubic feet in storage.

“That figure is 48.3 percent more than the five-year average, the Energy Department said,” reports the AP. “Natural gas fell 3 cents to finish at $2.27 per 1,000 cubic feet in New York. The price has fallen about 27 percent this year and is at the lowest level in a decade.”

Last week Abound Solar announced it would lay off half its workforce despite receiving a $400 million loan guarantee from the Department of Energy last year. The rating agency Fitch’s hit Abound over failures to meet stated goals, old technology, calling the company “highly speculative” according to ABCNews.

Reports ABC:

It remains way too early to determine whether Abound is poised to follow the trajectory of the best-known solar manufacturer to receive a sizeable government loan — Solyndra, the California firm that filed for bankruptcy in September after having burned through the bulk of its $535 million federal loan.

Perhaps.

However, there is an old saying in the market that the tape doesn’t lie.

And the tape on solar companies is horrendous.

In the second quarter of 2008 First Solar (Symbol: FSLR) briefly touched $300 per share. Today it trades at $27.49. That equals losses of about $24 billion in market capitalization in just four years.

In April of last year Trina Solar LTD (Symbol: TSL) was trading just under $30 and is now trading at about $7.31. Earnings estimates have gone in the last few months from Trina losing about 17 cents per share for 2012 to losing about 63 cents per share.

The Guggenheim Solar ETF (Symbol: TAN) has also moved down from around $300 per share in mid 2008, until it trades now at $27.02.

And the fundamentals aren’t getting better for solar soon, because solar can’t compete with coal-fired or nuclear generated electric.

“Fewer solar panels will be installed this year,” reports Bloomberg “as the first drop in more than a decade worsens a glut of the unsold devices that’s already slashed margins at the top five manufacturers, an analyst survey showed… Without government incentives, even record low prices for solar panels may not be cheap enough to encourage solar farm developers and homeowners to install them in the volumes needed to work through the glut, said Rozwadowski, the most pessimistic analyst in the survey. He expects installations to drop to 20.7 gigawatts.”

It’s important to note that the poor performance of the solar industry came at a time when government financial support has been at an all-time high world-wide. It only goes to show that politics and public policy are poor substitutes for free market economics.  

Expect the solar industry to continue to crash and burn as government money continues to dry up along with public support.   

Colorado’s Own Green Loan Sinkhole – Michelle Malkin – Townhall Conservative Columnists

Image representing Abound Solar as depicted in...

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Colorado’s Own Green Loan Sinkhole – Michelle Malkin – Townhall Conservative Columnists.

There’s no escaping Solyndra Syndrome. Here in my home state of Colorado, citizen journalists have uncovered our own gaping government green loan sinkhole. The stench of Chicago-on-the-Potomac is fouling the fresh Rocky Mountain air.

Meet Loveland-based Abound Solar, the lucky winner of a $400 million federal loan guarantee from the Obama administration. Earlier this month, the thin-film cadmium telluride solar module-maker announced layoffs of nearly 300 employees (70 percent of its workforce). In addition, the firm froze plans to build a new factory in Indiana. Abound says it will ride out bad market conditions and “hopefully” survive until the market recovers.

But White House hope-a-nomics is what got Abound and taxpayers into trouble in the first place.

Back in 2010, President Obama promised America in his weekly radio address that Abound would “manufacture advanced solar panels at two new plants, creating more than 2,000 construction jobs and 1,500 permanent jobs.” Energy Secretary Steven Chu waves his green pom-poms, too. “Not only is this investment creating thousands of jobs, but it is also increasing our renewable energy manufacturing capacity and putting us on the path for our future prosperity.”

Like the rosy projections Obama and Chu used to justify pouring half-a-billion dollars in eco-subsidies down the now-bankrupt Solyndra solar drain, Abound’s financial outlook was based on mathematical make-believe. Hope plus change equals fail. Turns out Abound raked in green government funds despite big red flags from Fitch Ratings.

GOP House Oversight and Reform Committee Chairman Darrell Issa wrote: “Fitch describes Abound as lagging in technology relative to its competitors, failing to achieve stated efficiency targets, and expecting that Abound will suffer from increasing commoditization and pricing pressures. DOE’s willingness to fund Abound, despite these concerns, calls into question the merits of this loan guarantee.”

The financial mess was reported by ABC News, but the Obama administration has so far escaped real scrutiny of his crony venture socialism.

How were Fitch’s warnings ignored? Thanks to the intrepid investigative work of Colorado’s Todd Shepherd at CompleteColorado.com, Amy Oliver at the Independence Institute and Michael Sandoval at the People’s Press Collective blog, the crass political science driving this latest Department of Energy loan scandal has been exposed. The loan deal appears to be textbook “pay-for-play” between Team Obama and one of Colorado’s wealthiest progressive activist scions, Pat Stryker. She’s the billionaire heiress whose family founded a medical device and software company. Her investment firm, Bohemian Companies, dumped nearly $500 million into Democratic coffers between 2008 and 2012. Bohemian also invested considerably in Abound.

Colorado Democratic Rep. Betsy Markey, a backer of job-killing cap-and-trade policies and other stifling environmental regulations, pushed for the massive Abound DOE loan. As CompleteColorado.com noted, Stryker donated personally to Markey’s campaign, and Abound ran ads thanking Markey for her eco-radical voting record. Like Solyndra chief investor George Kaiser, Stryker has visited the White House on more than one occasion. Like Kaiser, Stryker is a top Obama bundler.

This week, CompleteColorado.com obtained a new set of documents revealing “that Abound Solar created an unexpected, and previously unreported 10 day production shutdown over the Christmas and New Year’s holidays, and then went on to tell employees, ‘Don’t let the rumor mill create false purposes for this shutdown.’ The shutdown was announced to employees just after Thanksgiving by company president Craig Witsoe.”

On Thursday, Chu refused to tell House lawmakers and the public how many more DOE solar boondoggles are at risk of going under. He couldn’t “recall the exact number.” Funny how fraudulently exact they can be in cooking up jobs numbers, but how chronically amnesiac they are when it all blows up.

Hope-a-nomics: It’s every green bundler’s paradise and every taxpayer’s nightmare.

Stuck On “Stupid Liberal” Mode – Mark Baisley – Townhall Finance

 

Stuck On “Stupid Liberal” Mode – Mark Baisley – Townhall Finance.

BLACK MARKET TOILETS
My dad builds custom homes in California and the regulators at all levels routinely give him new, maddening impediments to practicality.  The example that I remember most had to do with toilets. 
In response to the apparent public outcry about excessive tank capacity, sales of toilets that exceed 1.6 gallons per flush have been banned throughout America.  United States Senator Rand Paul recently told a senior bureaucrat at a Senate hearing, “Frankly, my toilets don’t work in my house, and I blame you.” 
If you are like Senator Rand and don’t think that it makes sense to have to flush twice to make up for a deliberately insufficient vortex, you can buy a Canadian-made 3.5 gallon toilet on the black market.  Can you imagine having that crime on your rap sheet?
POISONOUS LIGHTBULBS
The government’s Office of Energy Efficiency and Renewable Energy (EERE) at the Energy Department also thought it would be really swell if Americans would use less electricity to match their new toilets.  So, they made some suggestions, through nationwide mandates, that we replace our bright, warm, inexpensive light bulbs with compact fluorescent lighting (CFL). 
CFLs don’t lend as much ambience, they are vastly more expensive, and they take a while to warm up before they can perform their singular purpose in our lives.  But, they do provide an element of mercury for you to deal with when they burn out or break. 
The Environmental Protection Agency recommends that, if your CFL light bulb breaks, first get all people and pets out of the room, shut down your air conditioner for several hours (another excellent suggestion for saving energy), and thoroughly collect every bit of glass and powder into a sealed container. 
The government’s Energy Star program argues that this mandate actually reduces mercury emissions in American households because CFLs demand less electricity from mercury-generating coal plants that poison the fish we eat.
FUNNY THING ABOUT PHOSPHATES 
About a year ago, I called the manufacturer of our dishwasher with a performance complaint.  The 10-month-old appliance was simply no longer getting the dishes clean.  The repair guy approached the situation like the main character on the TV show House
His assessment was that all three name-brand detergents we had on hand were too low on phosphates to get the job done.  It turns out that ours is one of millions of households victimized by the latest regulation – low detergent phosphates.  We now dump in twice the normal amount of detergent and set the cycle to “stupid liberal mode” which runs the dishwasher for nearly three hours, using 50% more water and electricity.
BOGUS BUREAUCRATS
It is hard to believe that these busybody bureaucrats are simply trying to improve the environment.  Evidence to the contrary includes the results of an investigation by the Government Accountability Office.  They received an Energy Star label for their application of a gas-powered clock radio (really).  
With a full staff of uniformed gropers at every airport, Obamacare and government controlled thermostats on the horizon — I mean, if one were to undertake the goal of listing the most personally intrusive acts that a government could commit against its people, I think this list would just about be it. 
With their hands in my pants, my physical health, my home, and even my toilet, I have never felt so uncomfortably close to my government.

A Stupid Energy Policy – Amy Oliver – Townhall Finance

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A Stupid Energy Policy – Amy Oliver – Townhall Finance.

By Amy Oliver and Michael Sandoval

If lawmakers really cared about consumers, they would ditch expensive renewable energy mandates that require a subsidized market for resources that are not practical on a large scale.  It’s a classic case of putting the cart before the horse; policy came before practical application.

The Department of Energy (DOE) reports that 24 states and the district of Columbia have renewable energy mandates ranging from Maine’s high of 40 percent to Pennsylvania’s low of 8 percent.  Also known as a “Renewable Portfolio Standard” (RPS), these policies require that energy providers ignore practicality and price in order to obtain a minimum amount of electricity by a specific date from sources that environmental zealots consider “renewable,” such as solar and wind.

Five other states, North Dakota, South Dakota, Utah, Virginia, and Vermont, placate special interest groups while remaining more realistic with “non-binding goals” rather than an RPS.

Does it matter if the resources don’t exist to fulfill the RPS? No. Government will subsidize the manufacturing of those resources. Does it matter if those resources are little more than science projects? No. Government still will subsidize them.

The U.S. doesn’t have a corner on the market of misguided energy policy. Europe is also a major contributor to the myth of enlightened energy policies.

These mandates are rooted in a clean, green fantasy, and a market must be invented to fulfill it. If that isn’t ridiculous enough, government then cannibalizes the market it created by subsidizing companies where the market is already saturated.

Colorado, with its 30 percent RPS, is a perfect case study of an energy absurdity.  In particular, its highly subsidized solar panel industry likely is contributing to a global decline in the market that threatens the very fantasy it is trying to fulfill.

General economics of the solar industry

To say the taxpayer-supported solar panel industry is struggling is an understatement. The Economist explains that subsidized manufacturing and purchasing distorted the market.  Prices declined but subsidies didn’t. As a result, global “demand for solar panels doubled last year driven by soaring growth in Germany and Italy.”

American manufacturing, much of it subsidized with taxpayer guaranteed loans, ramped up in response to European demand as well as the push to meet U.S. state renewable energy mandates.

What a difference a year makes. Facing a massive debt crisis and the enormous cost of the subsidies to European electricity consumers, governments greatly reduced their subsidies and demand for solar panels plummeted.

The Economist concludes that the market is grossly oversaturated. “In expectation of more roaring growth, the world’s panel-making capacity was tripled over two years, 2010-11…Much of the excess capacity is being shut down, yet there are already plenty of unwanted panels out there. To avoid being stuck with old stock—a ruinous prospect when prices are falling rapidly—panel-makers are now slashing margins.”

This is a disaster for U.S. solar panel manufacturers, even low-cost ones. With a saturated market and cuts in European subsidies, manufacturers are stuck with panels they can’t sell at cost.

First Solar

Tempe-based First Solar, manufacturer of one of the world’s cheapest thin-filmed panel, is in a world of hurt.  Its stock price has crashed from a 52 week high of $175.45 to under $50.

Just recently, First Solar CEO Rob Gillette was fired and replace with co-founder Michael Ahern. Not even Ahern has complete faith in the company he started. He sold off “notable quantities of First Solar stock over the years, including about $150 million worth in March and August of this year, and $142 million in February 2010.”

Reuters reports a “massive oversupply of solar panels and the plummeting costs of polysilicon panels are putting pressure on First Solar’s core business. The firm’s thin-film panels are among the industry’s cheapest, but Chinese-made polysilicon panels are still cheaper—and increasingly so.”

“It has become a familiar story in the solar industry—and a key reason why Solyndra, another thin-film solar panel maker, fell apart. Government subsidy cutbacks have reduced demand, while cheaper panel prices have given an edge to Chinese manufacturers.”

If the largest producer of the least expensive, thin-filmed panels is struggling under the weight of too much supply (including cheap Chinese panels), not enough demand, and not enough taxpayer money, why would we subsidize more solar panel manufacturers and further distort the market? Good question.

Colorado, with help from the federal government, has done just that.

Narrowly Avoiding a Colorado ‘Solyndra’

In early 2009, then newly appointed U.S. Senator Michael Bennet (D-Colo.) touted the prospects of Ascent Solar, a Colorado solar panel manufacturer, and the plans for a new facility to add as many as 200 new jobs for the state’s “New Energy Economy.” Then-Governor Bill Ritter and U.S. Senator Mark Udall, joined their fellow Democrat in offering pleasant platitudes about the “green energy” panacea.

Ritter was effusive with his praise and optimistic about Ascent’s future. “The New Energy Economy is leading Colorado forward and will be one of the keys to bringing us out of this recession. Colorado and Ascent Solar’s success are a model for how America can and must re-tool our entire economy,” declared Ritter. Even the local media couldn’t help but promote such rosy projections.

Fast-forward less than two years. Ascent, perhaps recognizing the fragility of the market, or at the very least, an unprofitable business model, conducted a “market pivot” and a change in business strategy. That switch meant cutting staff—instead of growth of nearly 200 jobs Ascent pared its staff back by half, mostly in production.

All of this occurred while Ascent had reached the ‘due diligence’ phase of the infamous DOE loan guarantee program, with the firm asking for $275 million in taxpayer assistance. But the change in business plans forced Ascent to reconsider its application and the request was quietly pulled—receiving almost no media coverage months after the announcement of DOE consideration.

The decision elicited just a few lines in its 10-Q filing for the first six months of 2011. “On February 23, 2011, the DOE informed us that our submission was selected for due diligence review by the DOE. Timing and funding requirements under the loan guarantee program did not correlate with our revised business plan and consequently, in April 2011, we informed the DOE that we were withdrawing our submission from further consideration under the program,” said Ascent.

Or perhaps it also had something to do with the $85 million write-down that Ascent would incur in altering its business plan, on top of the nearly $90 million in losses it had already accumulated in just five years. Measured against just a little more than $8.6 million in sales over the same time frame, Ascent was nowhere near profitability.

The DOE, however, saw fit to advance the company’s application to the ‘due diligence’ phase. But it would not be American taxpayers on the hook this time, as Asian investors made a $437 million last-minute bailout of the company.

But the consolidation of companies isn’t an indicator of the health of the industry, according to the San Francisco Chronicle. A worldwide price plunge in solar manufacturing has forced weaker (read: not viable) companies to merge or close.

So, without government subsidies there would be almost no supply of solar modules, but without government subsidies there is almost no demand. Artificial markets are doomed to failure. At this juncture, only low-cost Chinese manufacturers may stay afloat with more limited competition, while that country maintains a near-monopoly on the precious, non-green rare earth minerals critical to solar manufacture. Oh boy.

Despite Ascent’s retraction, Colorado is home to DOE recipients, including Goldman-Sachs subsidiary Cogentrix and its $90.6 million loan, and the darling of local Democratic donor Pat Stryker’s Abound Solar, which received a $400 million guarantee.

GE plans to build the country’s biggest solar plant in Colorado, a $300 million project. Their source for inspiration? First Solar. Both make the more harmful Cadmium telluride panels. And who does GE put directly at risk in the fragile solar market? According to the New York Times, it’s Abound Solar.

All while GE itself stands to receive more than $1.5 billion in government loans and grants for a windmill project in Oregon, despite being a company with $170 billion market cap and paying virtually no federal income taxes in 2010.

Considering that almost any DOE or any government subsidy these days is charged to the country’s credit card as debt financing, these government subsidies are actually turning into the dollars that China uses to subsidize its own solar firms. Financing not only your company but also that of your competition is sheer government malfeasance and economic suicide.

Conclusion

To say that both national and state energy policies on renewables – especially solar – are absurd is unfair to the word absurd. The fantasy of “green energy” as policy requires that government mandate, create, and, then, subsidize an economically impractical source of energy. It makes no sense. Just look at Ascent, Abound, Solyndra, First Solar, and, of course, consumers .

The Independence Institute’s environmental policy center estimates that Colorado’s RPS will cost Xcel Energy (our primary electricity supplier) ratepayers more than $100 million in 2011 alone.  That’s just one year in one state.

In its most recent compliance plan, Xcel admits what many “green” energy zealots won’t, that without massive taxpayer subsidies, renewable energy isn’t economically viable. 

Europe is also realizing how expensive it is and is slashing subsidies. A recent report predicts electricity prices will go up 100 percent by 2050.

At least one elected official in the U.S. has come to his senses. Maine Governor Paul LePage recently stated that his state must get rid of its job-killing 40 percent RPS because it raises energy costs putting the state at an economic disadvantage.

It is time for more common sense such as Gov. LePage demonstrated. Government must stop enabling the fantasies of green energy zealots with renewable energy mandates and massive taxpayer subsidies for failed companies and their science projects.

Amy Oliver Cooke is the founder of Mothers Against Debt (www. Mothersagainstdebt.com). She is also the director of the Colorado Transparency Project for the Independence Institute and writes on energy policy.  She can be reached at amy@i2i.org. Michael Sandoval is the Managing Editor of People’s Press Collective and a former political reporter for National Review Online.

LAMBRO: Shining spotlight on solar panel bankruptcy – Washington Times

Seal of the United States Department of Energy.

LAMBRO: Shining spotlight on solar panel bankruptcy – Washington Times.

The White House’s half-billion-dollar loan to a now-bankrupt solar-energy firm is just the first act in an emerging scandal of insider political influence over a deeply flawed clean energy program.

What has come to light so far as part of a congressional investigation is the administration’s willful order to approve a bad loan, despite dire warnings from a number of federal officials that the Solyndra Corp., a California-based solar panel maker, was in deep financial trouble.

A steady stream of government emails released by a House Energy and Commerce subcommittee tells a sordid tale of a company that President Obama turned into an energy showcase for his $40 billion loan program – until it went bankrupt in August, putting 1,100 employees out of work.

One of the people who promoted Solyndra’s $535 million loan, which now will be paid by federal taxpayers, was Steven J. Spinner, a senior Energy Department adviser, a major fundraiser for Mr. Obama and a Silicon Valley investor who was given the job of guiding the government’s clean-technology investments.

He not only was the one of Solyndra’s unabashedly inside defenders, his wife worked for the California law firm that represented the solar company and helped it file for the government loan her husband was promoting.

While internal concerns were raised about Solyndra’s shaky finances as early as the summer of 2009, Mr. Spinner emailed a top aide to then-White House Chief of Staff Rahm Emanuel that Solyndra was a financially solvent company that fully deserved the administration’s support.

“I haven’t heard anything negative on my side,” he told Mr. Emanuel’s aide in an email about the warnings. “I … have no idea what they’re referring [to].”

As the loan deal stalled after internal criticism of the firm’s looming insolvency, Mr. Spinner grew more impatient. “How [expletive] hard is this?” he wrote to a career Energy Department staffer Aug. 28, 2009, about its delayed clearance from an Office of Management and Budget official. “What is he waiting for? Will we have it by the end of the day?”

But internal complaints from OMB and Treasury about Solyndra’s dubious finances as well as the favorable terms of its loan persisted. That sparked further internal debate about the legality of the loan’s revision, though to no avail.

Dismissing warnings that the government’s restructuring of the loan was illegal and should be reviewed by Justice Department attorneys, Energy officials moved ahead with changes in February that required Solyndra’s investors be repaid before taxpayers if the company defaulted on its debt.

Other emails released by the House panel last month reveal a politically pressured program that was heavily influenced by powerful special interests that had a stake in its outcome.

“In an administration that said it would curtail lobbyists’ influence, the documents show ardent lobbying by political appointees inside the agencies and significant White House access given to venture capitalists with a major stake in the $40 billion stimulus investment program for clean energy,” The Washington Post reported last month.

One of these venture investors was David Prend, whose company, Rockport Capital, was a Solyndra backer. He met with White House officials about the deal in March of 2009.

“It was great to meet you with [then-White House climate adviser] Carol Browner last week,” Mr. Prend wrote. “I look forward to working with you to get the message out and to effect real change in the Energy Industry. I will follow up shortly on 2 of the companies we discussed,” he said. One of them was Solyndra.

But emails from government officials to Energy officials, who were responsible for reviewing the deal, were growing increasingly critical of Solyndra’s rising debts and declining revenues.

“DOE … has one loan to monitor and they seem completely oblivious to this issue,” an OMB analyst wrote April 2, 2010.

“What’s terrifying is that after looking at some of the other [loan-guarantee projects] that came next, this one [Solyndra] started to look better,” a budget analyst email said.

“Bad days are coming,” another OMB analyst wrote, referring to other shaky companies the Department of Energy was prepared to invest in as part of Mr. Obama’s loan-guarantee program.

As news stories proliferated about Solyndra and the president’s job approval polls sank further last month, Rep. Fred Upton, Michigan Republican and chairman of the House Committee on Energy and Commerce, and Rep. Cliff Stearns, Florida Republican and chairman of its investigating subcommittee, accused the White House of “stonewalling” its demands for further documents about the West Wing’s role in the scandal.

“What is the White House trying to hide from the American public?” they said in a statement last week, warning they will be forced to subpoena the requested documents if they are not forthcoming.

Last week, in an effort to blunt the GOP’s demands, White House Chief of Staff Bill Daley ordered a 60-day review to evaluate the administration’s entire $35 billion loan portfolio. That may be too little, too late. Insiders say that future loans may be in trouble as well.

Meantime, other internal White House emails show there was a growing fear within the Obama administration that Solyndra’s finances were weak when it was given the green light. Indeed, one unusually blunt White House email suggests that the Energy Department was woefully “ill-equipped” to make these kinds of investment decisions.

So hang on to your wallet. Look for more failed loans in the months to come.

Donald Lambro is a syndicated columnist and former chief political correspondent for The Washington Times.

Another Obama outrage – Tea Party Nation

US Department of Energy seal

Another Obama outrage – Tea Party Nation.

Posted by Judson Phillips

Fourteen million out of work.  Twenty six million under employed.  The Obama regime is spending money like drunken Democrats.  The Party of Treason is hitting all of the news outlets telling America that the productive (read anyone with a job) must pay higher taxes.

 What do we need to pay higher taxes for?

 From ABC News:

 With the approval of the Obama administration, an electric car company that received a $529 million federal government loan guarantee is assembling its first line of cars in Finland, saying it could not find a facility in the United States capable of doing the work.

Vice President Joseph Biden heralded the Energy Department‘s $529 million loan to the start-up electric car company called Fisker as a bright new path to thousands of American manufacturing jobs. But two years after the loan was announced, the job of assembling the flashy electric Fisker Karma sports car has been outsourced to Finland.

“There was no contract manufacturer in the U.S. that could actually produce our vehicle,” the car company’s founder and namesake told ABC News. “They don’t exist here.”

Henrik Fisker said the U.S. money so far has been spent on engineering and design work that stayed in the U.S., not on the 500 manufacturing jobs that went to a rural Finnish firm, Valmet Automotive.

 What?????

 That is right.  Our tax dollars are going to subsidize the construction of electric cars in FINLAND!

 Perhaps when Obama told us America had 57 states, he was including Finland.

 This is insane.

 We are rushing headlong to bankruptcy and the Obama regime is sending our money overseas to subsidize jobs in another country?   Let’s see.  The Obama Regime is giving money to companies like Solyndra, which have no real chance at being profitable and then giving money to create jobs in other countries.

 You know there has to be more to this story. There is a second company involved called Tesla.  Tesla has received $465 million in loan guarantees from the Government.

 There is even more and you can probably guess the rest. Obama contributors and a prominent Democrat are involved as an investors.

 More from ABC News:

 Energy Department officials have been steadfast that politics never entered the picture and each project was screened by professionals and secured on the merits. And executives from Tesla and Fisker said they won government support because their projects had the best shot at success. They said the involvement of well-connected figures in their companies should not suggest they attempted to use special influence to secure the loans.

Both companies have political heavyweights behind them. One of Fisker’s biggest financial supporters, records show, is the California venture capital firm Kleiner Perkins Caufield & Byers. The firm financially supports numerous green-tech firms, records show.

Kleiner Perkins partner John Doerr, a California billionaire who made a fortune investing in Google, hosted President Obama at a February dinner for high-tech executives at his secluded estate south of San Francisco. Doerr and Kleiner Perkins executives have contributed more than $1 million to federal political causes and campaigns over the last two decades, primarily supporting Democrats. Doerr serves on Obama’s Council on Jobs and Competitiveness. Doerr has not replied to interview requests since March.

Former Vice President Al Gore is another Kleiner Perkins senior partner. Gore could not be reached for comment.

“Their major venture investor is Kleiner Perkins, who has Al Gore as a partner and is certainly politically connected in general,” said industry observer Sexton. “Whether that played a role or not is up to the DOE to explain.”

Tesla brings political pull, as well. A former Tesla board member, Steve Westly, is an Obama bundler who raised hundreds of thousands of dollars for the president in 2008 and for his 2012 re-election campaign. 

 Obama bundlers and Al Gore are involved in another goofy money losing scheme that will do nothing for the American tax payer but leave us on the hook for billions of dollars.

 Let’s hope one of the first orders of business for the new Attorney General in 2013 is grand jury investigations about these deals.

MURDOCK: Green jobs are a national scandal – Washington Times

MURDOCK: Green jobs are a national scandal – Washington Times.

Solargate is just the tip of the iceberg. This cliche within a mixed metaphor reflects the madness of President Obama’s obsession with “green jobs.” It would be bad enough if this disaster were limited to possible criminality at Solyndra, the California-based solar-panel maker that Mr. Obama stimulated with loan guarantees despite repeated internal warnings. Solyndra’s Aug. 31 bankruptcy transformed 1,100 green jobs into pink slips and marinated taxpayers in $527 million of red ink.

But many green-jobs programs that have not been raided by the FBI – as befell Solyndra on Sept. 8 – nonetheless are fiscally reckless enough to merit a five-alarm national scandal.

Consider:

c Hopewell Junction, N.Y.’s SpectraWatt Inc. scored $500,000 from the Energy Department in June 2009 and $150,000 from the National Science Foundation in June 2010. On Aug. 19, the solar-power company went bust.

c Evergreen Solar was stimulated with $5.3 million of Massachusetts government cash and praised by the White House for helping “kick-start the economy.” Evergreen went bankrupt on Aug. 15.

c Mountain Plaza Inc. went bankrupt in 2003. Nonetheless, its “truck-stop electrification” technology won $424,000 in EPA stimulus funds administered by Tennessee’s Transportation Department. Yet again, Mountain Plaza filed for bankruptcy in June 2010.

c Notwithstanding its February 2009 bankruptcy and default on a $58 million loan from BNP Paribas, Wisconsin-based, ethanol-oriented Olsen’s Mill Acquisition Co. was stimulated with $10 million in January 2010, along with Olsen’s Crop Service. ADM purchased the defunct operation’s assets last month.

Team Obama also has subsidized projects that may be neither fraudulent nor failed, per se, but severely abuse taxpayers.

c As the Wall Street Journal reports, cash-strapped Americans are changing babies’ diapers less frequently and doubling down on diaper-rash ointment. What a perfect time for Team Obama to subsidize foreign solar companies.

The Energy Department on June 18 gave Solar Trust, an American subsidiary of Germany’s Solar Millennium, a $2.1 billion loan guarantee for a Blythe, Calif., solar-power facility. Also in June, Energy handed Spain’s Abengoa Solar a $1.2 billion guarantee for its Mojave Solar Project in California, and in December 2010 it backstopped $1.45 billion for Abengoa’s Gila Bend, Ariz., outpost.

c On Sept. 28, Energy approved a $737 million loan guarantee for Nevada’s SolarReserve Project. It promises 600 construction jobs at $1.23 million each and 45 permanent jobs at $16.4 million per position. Energy also guaranteed $337 million for Sempra Energy’s Mesquite Solar Project in Arizona. Its 300 construction jobs cost $1.12 million each, while its seven permanent positions equal $48.1 million per job created.

c In Seattle, an Energy grant provided $20 million to weatherize homes. Sixteen months later, this outlay has generated 14 administrative jobs at $1.42 million apiece. How many homes have been retrofitted? Three.

While Mr. Obama “invests” up to $48.1 million per job, private employers hire the average employee for $58,510 annually, the Labor Department calculates.

When will liberals join conservatives in denouncing this green-jobs fantasy? While most free-marketeers would convert these funds to tax relief or debt reduction, only blind liberals cannot see that this extravagance impoverishes their favorite causes.

Every dollar that chases a money-losing windmill is a dollar that cannot fund Head Start.

Every million that spawns only one job is a million that cannot finance 270 average Pell Grants for needy college students.

And every billion that vanishes into green bankruptcy is a billion that cannot help impoverished Americans heat their homes with government assistance.

It would be refreshing to see liberals fight as hard for poor people as for solar panels.

Undeterred, the president chases the sun like a motorist speeding west across the desert as dusk approaches. He swears that the sun is within his grasp. Yet it stubbornly remains just beyond the horizon.

Too bad Mr. Obama won’t finance his self-defeating solar road trip with his own money.

Deroy Murdock is a columnist with the Scripps Howard News Service and a media fellow with Stanford’s Hoover Institution.

HANNA: Lies, failure and wasted money – Washington Times

TWO YEARS OF RUIN

Image by SS&SS via Flickr

HANNA: Lies, failure and wasted money – Washington Times.

During the 2008 presidential election, Barack Obama promised to lead the most transparent administration in U.S. history. Unfortunately for the American people, he has failed to deliver on his promise.

The Obama administration has approached its governing responsibilities as follows: Isolate a problem, proclaim an urgent need to address it, propose legislation and then try to ram it through Congress before people have a chance to read it or appreciate the exact effect it will have on the nation.

We already know that the president’s signature “accomplishment” – the sweeping changes to the nation’s health care system known familiarly as Obamacare – is not working out as advertised. During the debate leading up to the bill, the president promised over and over again that anyone who liked the health insurance he already had would be able to keep it and premiums would fall more than $2,500 for the average family under the new law. We now know both to be provably false. Premiums increased 9 percent in the first year of Obamacare, and more than 1 million Americans already have lost the coverage they wanted to keep.

These effects of Obamacare could have been more precisely determined, disseminated and avoided if the president hadn’t rushed the bill through without transparency or the necessary time for the Founders’ vision of a highly deliberative process.

The most recent example, and there are plenty of others, is the approach he has taken to the American Jobs Act, which he argues is needed to get America back to work. He wants Congress to pass it now – as he repeats like a broken record – without the public having had an adequate chance to look it over. Most people are unaware, for example, that there is a provision in the proposed bill that would create a new cause of action allowing people to sue a prospective employer if they believe they were turned down for a position because they were unemployed at the time they applied for it.

Such a law, if it were to go into effect, would be a welcome boon to the nation’s trial lawyers but would be a looming liability over anyone seeking to hire new employees. The cost of litigation, never mind the potential financial judgments, would be enough to make any business – small or large – fearful of hiring anyone, let alone any of the more than 9 percent of Americans who, according to the U.S. Bureau of Labor Statistics, don’t have a job but are looking for one. Talk about unintended consequences.

This same urgent approach was applied by the administration to its “green energy” agenda, which amounted to little more than shoveling money out the door to companies operating commercial activities of which it approved. Everyone now knows about Solyndra, the politically well-connected California-based solar company that got a half-billion dollars in loan guarantees from the U.S. Department of Energy only to go belly-up just a couple of years later, leaving more than 1,100 workers unemployed.

Any serious due diligence, it now seems clear, would have suggested the company was not a good place for an investment backed by U.S. taxpayers, but in the rush to promote the politically driven green agenda, caution was tossed to the political winds.

Now more than ever it is clear what former White House Chief of Staff Rahm Emanuel meant when he said a good crisis should never be allowed to go to waste. It was not just an excuse for growing the government; it was an excuse to grow the government recklessly in ways that rewarded political supporters and without regard to the effectiveness of a particular program.

It is clear that the operations of the federal government and the legislative process need to be more transparent and deliberative, something both parties can hopefully work to bring about in the days and weeks and months ahead. The debt-reduction supercommittee is a great place to start.

Colin Hanna is president of Let Freedom Ring.