Green wave receding

From the New York Times

Solyndra, a Silicon Valley solar-panel maker that won half a billion dollars in federal aid to build a state-of-the-art robotic factory, plans to announce on Wednesday that it will shut down an older plant and lay off workers.

The cost-cutting move, which will reduce the company's previously announced production capacity, is a sign of the notable shift in the prospects for cutting-edge American solar companies, which now face intense price competition from Chinese manufacturers that use more established photovoltaic technologies.

Just seven weeks ago, Solyndra opened Fab 2, a $733 million factory in Fremont, Calif., to make its high-tech solar panels. The new plant was supposed to be the first phase of a rapid expansion of the company.

Instead, Solyndra has decided to shutter the old plant and postpone plans to expand Fab 2, which was built with a $535 million federal loan guarantee.

"Fab 2 is much more efficient and cost-effective than our existing facility," Brian Harrison, Solyndra's chief executive, said in an interview. "We're adjusting our plans to be more in line with where the market is and where our business is at the moment."

When Solyndra filed for an initial public stock offering in December, it estimated it would have a total production capacity of 610 megawatts by 2013 if its two plants were fully built out. The company now expects it have capacity of 285 to 300 megawatts by 2013.

By the way, intense Chinese competition in the solar energy business has been known for years.

This was one of the companies blessed with a Presidential visit where Barack Obama laid his hands upon the company. As he should since the taxpayers' dollars he gave away might be related to the ties company officers and investors have to the Democratic Party.

I wrote about Solyndra during the summer and noted the shaky finances and unstable condition of the company (the auditor had to issue a going concern letter, highlighting the risk of possible failure-hence the rush to turn the spigots on to push taxpayer dollars to rescue the company-and its investors). Who might those investors include?:

One of the biggest investors in the company was Oklahoma billionaire George Kaiser - a big bundler for the Obama-Biden campaign. Not to worry for Mr. Kaiser. The administration is looking to extend hundreds of millions of dollars in additional loans (our money) to the venture. Needless to say, where is the major media that was so busy reporting on the Bridge to Nowhere (and that has also been conspicuously silent in the billions of dollars Robert Byrd sent to West Virginia to raise monuments to himself). Throwing good money after bad doesn't really matter when the money is Other People's Money and you are providing a return on investment for a big campaign donor out of the public purse.

From failure to recipient of tax dollars-hitting pay dirt at the federal trough. But that pay dirt looks more like mud as these companies face a cloudy future.

I have a god friend who is a bankruptcy partner at a major law firm. She cleaned up during the ethanol boom and bust. In the last 18 months or so she has been busy making contacts with the solar, windmill, and other assorted green schemers. She knows these companies cannot survive without government largess. European green companies are going belly up left and right without government aid (and such aid is hard to come by during these cash-strapped times). And so will ours.