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Obama at Solyndra: I'll Fight to Pass A Climate Bill This Year

Solyndra's Factory Ground-breaking

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):

How EV Battery Startups Can Cross the Valley of Death

Report: Cleantech Financing Trends: 2010 and Beyond

9 Responses to “Obama at Solyndra: I'll Fight to Pass A Climate Bill This Year”

  1. Thanks to Ms. Katie Fehrenbacher for an excellent update, and for bringing this subject up for public comment, as well.

    It’s high time our tax dollars went toward supporting the establishment of these up and coming infrastructure technologies, instead of subsidizing old technologies and defending (militarily) their grasp on the ancient sunlight resources beneath the feet of other cultures in lands far away.

    Whatever one might say about the climate change debate (and the forces of denial seem to be winning more than their fair share of the public mind on the subject), even a rational skeptic has two potential outcomes and two possible choices in addressing each outcome:

    Outcome 1 – Climate disruption meets or exceeds dire expectations.

    Choice A – We don’t do anything at all. Result: We all suffer increasingly for many, many decades. Summary: Disaster.

    Choice B – We do whatever we can to move to sustainability. Result: We give up time and money, but we live more comfortably with reduced impact severity. To sum up: work hard and succeed.

    Outcome 2 – Climate disruption is substantially overestimated.

    Choice A – We don’t do anything at all. Result: We continue suffer from a poisoned environment, but not a drought and flood-ridden environment. To sum up: No improvement.

    Choice B – We do all we can to change. Result: We lose time and money, but still enjoy increased efficiencies and pollution reductions. To sum up: We struggle a little more than necessary, but we still come out way ahead.

    So, the one reasonable option (where there’s any doubt at all about the potential outcomes) is to do all we can to lower our emissions – and then benefit in either outcome. The alternative – to do nothing – leaves us politically and financially dependent on a poisonous foreign energy resource that’s increasingly scarce (at least relative to soaring demand), with the strong likelihood of widespread misery for generations either from the effects of pollution or scarcity or both.

    This is like buying insurance. You pay for it when you might not need it – but you’ll be sorry if you need it and don’t have it.

    Additionally, in considering national security, here’s a set of useful data. As of December 2002 over 80% of the world’s oil reserves was (and still is) in just sixteen countries. These top sixteen had 972 billion barrels. 69.98% of that was inside the war-torn and unstable Middle East. (Canada’s 180 billion barrels aren’t included because 96% is locked up in tar sands – prohibitively expensive in both energy and capital to extract, not to mention frightfully polluting.)

    We in the US ranked 11th among those 16 oil nations, with a mere 2.33% of their total, while Iraq ranked #2 just behind Saudi Arabia.

    India and China each have over a billion people rapidly chasing our lifestyle, and that slippery old ancient sunlight just can’t be sucked from the earth quick enough to meet that need.

    To read more on oil supply and demand check out:

    At the end of the day, we can’t keep using our brave fighting men and women to defend our access to foreign oil. We have to speed up our development of advanced alternatives.

    Kudos to Ms. Fehrenbacher and rest of the folks at earth2tech for the fine reporting and the chance to listen and talk with others.

    Craig Shields, Editor,

  2. Rich William

    Check the records; Solyndra raised the requisite funds and now has the gov’t guaranteed money. This is being used to build fab 2.

  3. Joe Stanford

    Do you realize that these DOE funds are not available to Solyndra until they hit certain milestones? This post reads like they already have the money. From the S-1: “We will need to meet certain funding conditions in order to draw funds under our $535 million DOE guaranteed loan facility and we are also subject to a number of affirmative, negative and financial covenants under this facility.”
    The financing agreements with the Federal Financing Bank and the DOE governing our $535 million loan facility require us to meet certain funding conditions related to the development and construction of Phase I and specific performance milestones related to Fab 1. Our failure to meet any of these conditions to funding could result in our inability to access funds under this loan facility.”