The Downfall of Solyndra

The downfall of Solyndra is a sad event for its employees, its investors, and the town of Fremont.  For the industry, though, it represents another, albeit painful, step in the evolution of the solar industry. Because it is a young industry, there is a multitude of variables which are shaping its development: PV material costs, natural disasters (Fukushima), man-made disasters (mercurial government trade and energy policy), the cost of traditional energy, and so on. It would do well to follow the lead of a number of industrial models when charting its course for the long term.  The two obvious ones are the construction industry and the energy industry. 

As a long time member of the roofing industry, I expected Solyndra’s demise to derive from the same source I see impacting the entire ballasted solar panel industry: ballasted systems are simply not a good idea from the perspective of anyone in the construction trades.  Roofs are not intended to have things left on them as an afterthought.  They can be heavy with inappropriate point loads, they impede adequate flow of water, they can cause depressions in the roof membrane resulting in ponding and eventual membrane deterioration – I could go on, but you get the picture. Roofs are not built to accommodate this stuff. If a ballasted system can result in problems down the road due to roof leaks, or becomes a major pain when re-roofing is called for (don’t forget that one – all roofs get repaired and replaced) the short term savings of the ballast purchase pale compared to remediation costs. So, at the end of the day, I believe that, apart from the other influences resulting in the early demise of Solyndra, the company was going to go the way I fully expect almost all ballasted systems to go. Remember the Hummer? Cool look and technology, but it had no place on America’s roads or in America’s economy.

With regards to the energy industry, consumers and businesses have only fleeting interest in the “wow” factor of new and cool energy sources. Ultimately, they want reliability, to minimize their energy costs, not think about where it is coming from, or about maintenance.  If solar costs too much or is too much hassle it simply can’t fly. But the “cost” problem is more nuanced than many in our industry acknowledge.  When a power plant is built anywhere, it is designed to generate power literally for generations, and can be expensive.  A focus on using cheap equipment or materials might save money in the short-term, but may end up costing the plant and its customers in the long run.  So when solar installers sell systems, they should think like builders; design and build it to last for generations.

Finally, it is absurd to think that the solar industry will or should ever be disassociated from government intervention, support and direction. Unfortunately Solyndra is going to be used as an example of government’s inability to choose winners and losers. The venture capital industry understands this kind of investment strategy very well. They know that some or most of the investments they make will fail, but they remain in business (and many make boatloads of money) because of the winners they choose.  And remember, there was a lot of venture capital invested with Solyndra.  Were the venture capital guys wrong, or was it part of the landscape?  With something as nationally important as energy production, the government cannot sit on the sidelines. They will make investment mistakes, but they will also choose winners. Consider the aerospace industry: without government support and cooperation (choosing winners) we would not have a Boeing—our biggest exporter and a massive employer.  There is not a single significant energy source used today which has not been subject to government involvement.  The idea that solar should be able to stand on its own absent any incentives, directives or regulation is sheer free-market naiveté. You have heard of the special treatment that the oil, coal, nuclear and hydro industries receive. To expect solar to be different is to place it at a completely unreasonable disadvantage.  Although it was the beneficiary of substantial government assistance, Solyndra failed. That failure is already being used as a political tool to discredit the current administration.  Our industry’s efforts in this area are fundamentally non-political in nature, and we need to make sure our politicians, while making political points, don’t throw the baby out with the bathwater.