by Todd Woody.
Silicon Valley in the Internet age has not made for great
presidential photo ops. The Valley’s computer-chip factories were off-shored
decades ago and (Google accepted) the software giants that supplanted hardware companies just
didn’t have the same pizzazz—T-shirted geeks writing code can’t compete with guys and gals in bunny
suits tending big futuristic machines.
The rise of green tech has changed all that. The Valley
is back in the business of building stuff—solar panels, electric cars, fuel cells, and various energy efficient
widgets and gadgets.
And so when President Obama’s helicopter landed Wednesday
morning at Solyndra, a solar module maker, a television-ready tableau awaited—a huge American flag hung in an unfinished factory, shiny high-tech thin-film
solar panels were on display and workers in hard hats mingled with an audience
of some 200 engineers, scientists, venture capitalists, and California’s patron
saint of green tech PR events, Governor Arnold Schwarzenegger.
“We’ve got to go back to making things. We’ve got to go back
to exports. We’ve got to go back to innovation,” said Obama on Wednesday
in Fremont as Solyndra employees snapped photos with their iPhones.
“The true engine of economic growth will always be companies
like Solyndra, will always be America’s businesses,” he continued. “But that
doesn’t mean the government can just sit on the sidelines. Government
still has the responsibility to help create the conditions in which students
can gain an education so they can work at Solyndra, and entrepreneurs can get
financing so they can start a company, and new industries can take hold.”
It’s an apt choice of words, for the fortunes of green tech
startups like Solyndra have become entwined with the government as the Obama
administration attempts to jumpstart a transition to a clean energy economy.
The sprawling solar module plant we’re standing in—its construction is
employing 3,000 workers—is being financed thanks in large part to a $535
million loan guarantee the Department of Energy granted to Solyndra last year.
A few months later, the startup filed for an initial public
offering. The extensive vetting of Solyndra that the federal government performed
before issuing the loan guarantee bolstered the company’s IPO (though Solyndra’s cash
burn rate led auditors to question its viability).
“This facility would not have been possible in the current
financial climate without that loan,” Kelly Truman, a Solyndra senior vice
president, told me as the presidential podium was dismantled and construction
workers returned to their jobs. “In terms of our business, having the Department of Energy
give us this loan has certainly given us some credibility because of the
scrutiny. We went through a year of due diligence.
Imagine the most conservative bank in the world looking you over.”
The federal stimulus package’s 30 percent cash tax incentive
for buyers of rooftop photovoltaic systems like those made by Solyndra has also
helped keep the solar industry growing at a rapid clip through the Great
Recession.
“But we’ve still got more work to do, and that’s why I’m
going to keep fighting to pass comprehensive energy and climate legislation in
Washington,” said the president, who called climate change “a threat to our way
of life.”
Maybe it was the luxury of being 3,000 miles away from Washington, D.C.
surrounded by apostles of an alternative energy future while the grim reality
of the fossil fuel present hung over his head, but Obama spoke more bluntly
than usual.
“We all know the price we pay as a country as a result of
how we produce and use—and, yes, waste—energy today,” he said. “And the
spill in the Gulf, which is just heartbreaking, only underscores the necessity
of seeking alternative fuel sources … With the increased risks, the increased
costs, it gives you a sense of where we’re going. We’re not going to be
able to sustain this kind of fossil fuel use.”
A few miles up the road from Solyndra sits the empty hulk of
the New United Motors Manufacturing Inc. plant. The now-defunct joint venture
between General Motors and Toyota was California’s only auto manufacturing
plant when the last Corolla rolled off the line in April. Its closing idled some 5,000
workers.
Last week, Tesla Motors, the Silicon Valley electric
carmaker, announced it was buying the NUMMI factory, tapping a $465 million
federal loan guarantee to close the deal. Tesla will build its Model S
battery-powered sedan at the plant and produce electric cars with Toyota,
putting about a thousand autoworkers back on the line.
“This is only the beginning,” Obama said, referring to the
Tesla deal. “We’re investing in advanced battery technologies to power plug-in
hybrid cars. In fact, today in Tennessee there’s a groundbreaking for an
advanced battery manufacturing facility that will generate hundreds of
jobs. And it was made possible by loans through the Department of Energy,
as well as tax credits and grants to increase demand for these vehicles.”
No surprise that Obama focused on the green jobs created by
the federal largesse. But in the long run, that investment will help cutting
edge technologies to scale.
Solyndra emerged
from stealth mode less than two years ago, having raised an initial $600
million and secured $1.2 billion in orders for its copper-indium-gallium-selenide solar cells. CIGS cells can essentially be printed on flexible
materials or glass without using expensive silicon. While such solar cells are
less efficient at converting sunlight into electricity, production costs are
expected to be significantly lower than making traditional silicon-based
modules.
Co-founded by chief executive Chris Gronet, a veteran of
chip equipment maker Applied Materials, Solyndra’s innovation is to coat long
glass tubes with CIGS solar cells. Conventional rooftop solar panels must be
tilted to absorb direct sunlight because they aren’t as efficient at producing
electricity from diffuse light. But the round Solyndra module collects sunlight
from all angles, including rays reflected from rooftops. That allows the
modules, 40 to a panel, to sit flat and packed tightly together on
commercial rooftops, maximizing the amount of space for power production.
While some commentators have questioned whether the DOE loan to Solyndra should have been directed at competitors with
lower costs, there’s no doubt that the company is a contender in an ever
competitive global market.
“There are factories like this being built in China,
factories like this being built in Germany,” said Obama. “Nobody is
playing for second place. These countries recognize that the nation that
leads the clean energy economy is likely to lead the global economy. And
if we fail to recognize that same imperative, we risk falling behind. We
risk falling behind.”
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