The latest news out of the Solyndra scandal is that Solyndra’s CEO Brian Harrison, and CFO, W.G. Stover, Jr., won’t attend the House Energy & Commerce’s hearing on Wednesday, but say they will testify the week of September 19. I don’t have any details on why they won’t show up this week, but the remaining two witnesses who will testify in front of the committee tomorrow are Jonathan Silver, Executive Director of the Loans Programs Office for the DOE, and Jeffrey Zients, the Deputy Director of the Office of Management and Budget.
We’ve interviewed Silver many times at GigaOM, including most recently at our Green:Net 2011 event in April 2011. Silver joined the DOE in late 2009, and was formerly the managing general partner at Washington, D.C.-based firm Core Capital Partners. I’ve embedded the Green:Net video interview below (which occurred in April 2011), and since we particularly asked him about Solyndra in the interview, I’ve transcribed his answers below (which occur around 9:20 minutes into the interview):
GigaOM: Let’s look back to the very first loan guarantee under this program, the Solyndra deal, which happened before you joined the program…
Silver: Thank you for saying that…
GigaOM: But it has also come under some criticism. What has the Department of Energy learned from that deal. Are there any places where your team now would have done things differently now.
Silver: Let me take a step back if I can and sort of position the discussion around that particular transaction because I think it’s been badly misunderstood in public discussions. First of all the selection of Solyndra was completely appropriate. It’s a very innovative technology that’s total cost of ownership is very dramatically less on an installed basis. It was exactly the kind of project we intended to fund.
The second is that things have not gone wildly awry, though things have been reported that way. The company did in fact use our financing to build a second fab, which is what they were supposed to do with it. They did it on time and under budget. They said they’d hire 3,000 people to build it and they did. Somewhere in the dialogue, what got lost was, they came out at one point and said that we expect our plant and our suppliers to hire an additional 1,000 people. When in fact what they did end up doing was they laid off some workers who worked in an older prototype plant even though the net total employment in the company was 300 greater than it was before when we financed.
This is also not a startup. This company will do about — it’s been reported, publicly, so I’m not saying anything that’s not a matter of public record — $140 million in revenue this year, that number doubled from the year before, and it doubled from the year before that. They’ve sold hundreds of thousands of solar panels here and abroad. So I’ve been in the investment business a long long time and I’ve never seen a company that went straight up without bumps along the way. This company has had some bumps, but I think things are moving in the right direction. And I expect that other projects in the portfolio will have some bumps and that those will be overcome, too. It’s inherent in the nature of building out innovative technologies at scale.
GigaOM: So no lessons learned from that deal…
Silver: Well, there are quite a few. I think we structure transactions a little bit differently now — we’re at 28 into them, and that was deal #1. We certainly have more human and technical and skill-based resources than we did originally. We are looking for certain kinds of things as we’ve worked our way through an inner agency process, which includes a review of these transactions by the OMB and Treasury. We’ve begun to be able to develop some policy frameworks for these things. So, yeah, I think there are quite a lot of lessons learned that have already begun to be implemented in the portfolio.
Here’s other interviews and articles we’ve done with Silver:
- DOE Loan Chief on Solyndra, Tax Grants & 2011, December 2010
- Q&A: DOE Loan Chief on Lessons for Greentech Startups, VCs, May 2010
- Former VC to Lead DOE Loan Guarantee & Green Car Loan Programs, November 2009