Abound Solar, a Colorado-based thin solar panel manufacturer, filed to liquidate this week. This bankruptcy made headlines all over the nation since Abound Solar was one of the new ‘clean energy’ companies that received a loan guarantee from the US Department of Energy. Although the company was awarded a $400 million loan guarantee in 2010, both the administration and the company were quick to announce that only a $70 million portion of the loan was claimed before bankruptcy.
The idea behind Abound Solar investment was that American companies would gain the upper hand over their international counterparts by employing superior technology. By investing in advanced computers and research, they reasoned, a new ‘green’ and efficient solar panel could be developed and traded profitably.
The spectacular failure of the company was blamed on aggressive and unfair Chinese competition that has been flooding the global market with very cheap standard solar panels. Chinese companies, observers claim, receive generous subsidies from the Chinese government and thus possess unique pricing advantages. It is important to notice that the Commerce Department imposed tariffs on Chinese solar panels in order to prevent this outcome, but was not successful. The Energy Department calculates its Abound Solar losses in $40-60 million range and stresses that it safeguarded 80% of the original loan guarantee. Thus, the loss to American taxpayers is at around 15%.
Although this compares favorably to the notorious Solyndra case where $535 million worth of taxpayer funds was lost for good, it is another worrisome sign for the administration’s new energy policy. President Barack Obama lauded Abound Solar’s loan in his weekly video address on July 3, 2010.
Critics of the administration’s energy policy were quick to respond to the news. Main argument coming from the conservative and Republican circles was that the Energy Department’s loan guarantees abound to nothing other than ‘crony capitalism’. Rep Cliff Stearns (R-FL), Chairman of the House Energy Committee’s subcommittee on investigations and oversight, described the administration clean energy policy as a “risky green jobs scheme” and advised the White House not to “pick winners and losers” in a capitalist economy. Critics are concerned that president’s scheme will crumble, potentially wasting billions of dollars of American taxpayer funds.
We will have to wait and see how this ‘clean energy’ adventure concludes. In the meantime, we will be anxiously staring at our laptop screens hoping that more taxpayer funds do not end up bankrupt.