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Solyndra's Shutdown Raises Questions about Stimulus, Green Jobs

Obama tours Solyndra plant in May 2010
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Obama tours Solyndra plant in May 2010
A third of all solar jobs in the Bay Area disappeared overnight

When Solyndra announced Wednesday that it was shutting down its solar panel manufacturing plant and intended to file for bankruptcy, the move stunned its 1,100 employees, who suddenly found themselves without jobs, and renewed criticism of President Barack Obama's stimulus package and his inability to deliver on a promise to create millions of green jobs.

It was just last year that Obama toured the company's new solar panel manufacturing facility and proclaimed the project "a testament to American ingenuity and dynamism." In 2009, the U.S. Department of Energy had awarded Solyndra $535 million in loan guarantees to build the plant, as part of the federal stimulus program.

To date, Solyndra has borrowed about $520 million of that amount, and received an additional $75 million loan earlier this year, according to the Department of Energy, but the company was not required to start making payments until next year.

If Solyndra defaults, as expected, the Department will have to repay the debt -- and the corresponding interest.

“We have always recognized that not every one of the innovative companies supported by our loans and loan guarantees would succeed,” said DOE spokesman Dan Leistikow in an official blog post. “But we can’t stop investing in game-changing technologies that are key to America’s leadership in the global economy.”

According to a report released in July by the nonpartisan Brookings Institution, approximately 3,600 people work in the solar sector in the Bay Area -- meaning about a third of all solar jobs in the Bay Area disappeared overnight.

While the Obama administration remains convinced that so-called green jobs are vital for the country's economic future, many Solyndra workers wondered if the bankruptcy meant that solar panels are simply too expensive to make in America.

"Things have been difficult for a few years, because of the Chinese competition," said Jim Dunphy, 44, who had worked for Solyndra for four years as a test developer. 

China's low wages and generous subsidies for the solar industry have helped drive the price for solar cells down by 42 percent since January. According to a Department of Energy report released Wednesday, the U.S. share of solar panel manufacturing fell from a peak of 43 percent in 1995 to just 7 percent last year.

"Panel prices have plummeted, and it's caused a huge dislocation," Dunphy said, arguing that if the United States wants to recapture its lead in solar manufacturing, it will have to follow China's lead and dramatically increase subsidies to the sector.

But with taxpayers likely footing the bill for Solyndra's bankruptcy, the possibility of massive new subsidies seems unlikely.

In a press release Wednesday, the company acknowledged the stiff competition it faced. "Global economic and solar industry market conditions have forced the company to suspend its manufacturing operations," the statement said.

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