The Solyndra cloud descends on cleantech

There is no escaping the dark spell cast by Solyndra’s bankruptcy in cleantech discussions these days. At two clean energy conferences in San Francisco this week, speakers invoked the name of Solyndra with the same frequency as religious believers do with their gods and saints.

Solyndra’s debacle served as a useful tool for sobering discussions about expectations, competition and unforeseen market forces. Comments from speakers, many of them investors, reflected mixed feelings about the impact of the solar panel maker’s failure. Solyndra laid off about 1,100 employees and filed for Chapter 11 this month after securing a $535 million federal loan guarantee to build a factory, which it completed last year. On Tuesday, a bankruptcy court judge approved an Oct. 27 auction of Solyndra assets.

“The failure of Solyndra has cast a shadow over the public discussions of advanced energy all over the country,” said Tom Steyer, senior managing member at Farallon Capital Management.

Here is a collection of what other speakers said about Solyndra at both the Renewable Energy Finance Forum and AlwaysOn GoingGreen in San Francisco over the past few days:

1. Failure is always an option. It seemed apropos that venture capitalist Vinod Khosla started his talk by extolling the virtues of failing and how overcoming any fear of it will help you succeed. When he was asked about Solyndra, Khosla said, “It’s a fact of life with startups that the majority of them will go under. The one that will win will win big enough to make up for the losses.”

2. Investment flow. The challenges Solyndra faced – rivals with lower manufacturing costs and a buildup of solar panel inventories in Europe, the largest solar market – were well-known many months before Solyndra’s investors gave up on injecting more money into the company to save it from bankruptcy, noted David Dolezal, UBS’s head of the renewable energy investment banking in the Americas. Many public companies have seen shrinking profits and declining share prices in the last nine months. “It was hard to raise money before Solyndra, and it will be hard to raise money after Solyndra,” Dolezal said. “I don’t know if it’s the catalyst per se.”

3. The offensive strategy. The fallout of Solyndra — from lawmakers’ criticism of the loan guarantee program to questions about solar energy’s prospect as a candidate to succeed fossil fuel energy — has been used by renewable energy opponents in their lobbying efforts, said Jeff McDermott, managing partner of Greentech Capital Advisors. “You shouldn’t stand for it as an industry,” McDermott told the audience at the finance forum. “You need to push back in any conversation.”

4. Influence on policy. Solyndra’s failing appeared at a time when key federal renewable energy programs were nearing their end and getting them extended was already a tough battle. Lawmakers were in a cost-cutting mood long before Solyndra shuttered its operation. Controversy surrounding the company’s loan guarantee will not only make it harder for lawmakers who support renewable energy to secure more funding for the programs. “The unfortunate outcome (of Solyndra) is drowning out all the positives from the DOE loan guarantee program. Some form of government support will be poisoned,” said Sandip Sen, head of global alternative energy group at Citigroup. (s c)

5. The positive message. So how do you cast the Solyndra failure in a conversation about renewable energy? “The loan guarantee program has proven results. We shouldn’t single out Solyndra or let anyone single out Solyndra as a reason for getting rid of the loan guarantee program,” said Dennis McGinn, CEO of American Council on Renewable Energy, which organized the finance forum. “It’s absolutely critical that the government be involved in this new energy economy.”

Photo courtesy of Alyssa L. Miller via Flickr