President Obama stopped by the factory of thin film solar startup Solyndra Wednesday morning in Fremont, Calif., to give a speech touting how investments from the stimulus package have been creating green jobs, and boosting the clean power industry. A year ago Solyndra, which makes tube-shaped solar gear, snagged the first loan guarantee ($535 million), from the Department of Energy and Solyndra has been building out a factory in Fremont that it says will be able to produce 500 MW of solar per year and employ about 1,000 people.
Obama, who was in San Francisco Tuesday night to attend a $17,600-a-plate fundraiser for Senator Barbara Boxer’s re-election campaign, also took the opportunity of the speech to tell the crowd that he will “fight to pass comprehensive climate change legislation and get it done this year.” (I watched the speech live on CNN). While the The American Clean Energy and Security Act of 2009 was approved by the House of Representatives last year, the Senate only just released a draft of their version of the bill, the American Power Act, or APA a few weeks ago. Many do not expect the congress to be able to agree on, and pass, an energy bill before the end of the year.
Obama and the DOE are using Solyndra’s factory as an example of a successful investment from the stimulus package. As we pointed out in our exclusive interview with Jonathan Silver, the former venture capitalist whom the Obama administration tapped to lead the Department of Energy’s loan guarantee and green car loan programs, one of the DOE loan guarantees can be crucial to the success of a startup. Loan guarantees essentially act as a promise by the government to make good on a loan if the company can’t fulfill it, and typically enables better interest rates and lower costs than would otherwise be available to a company for project financing.
Solyndra plans to raise more funding, including via an IPO and actually has applied for another DOE loan guarantee to expand its factories even more. But at this point it’s entirely unclear whether Solyndra will succeed or not. Solyndra had a net loss of $172.50 million for the fiscal year that ended January 2, 2010, and revenues of $100.47 million for the fiscal year. While the most recent net loss is smaller than the net loss from the previous year and the revenues are substantially larger, the company is still in that fragile stage of growth that many like to call “the valley of death.”
To learn more about how to cross the valley of death and other clean tech financing deals see GigaOM Pro (subscription required):