We Need More SolyndrasPosted: September 26, 2011
I’ve noticed that the recent media hubub about the government’s loan to failing solar producer Solyndra has many of those who are passionate about increased government support of the clean energy industry on the defensive. It shouldn’t.
The furious tea party/anti-government attack on Solyndra and clean energy is simply a part of a defeatist ideology; the mistaken notion that government can’t create jobs or improve the economy. The proper response is to attack this nonsense head on, rather than shy away from discussions about clean energy in the face of Solyndra publicity. This is an opportunity to make the case that we need far more support and loans to clean energy projects, not less.
Frankly, I consider it a disgrace that the government has only spectacular failure in its energy loan portfolio. Why? Because if only one company has failed, we aren’t making enough loans.
Those of us who are paying attention know the facts: of the $38 billion loaned by the Energy Department’s Loan Guarantee program to 40 different companies, only Solynda and its half a billion dollar loan half failed – in other words about 1% of the value of the loans have gone bad.
In fact, if our success rate is this high, it’s a sign that we’re probably being too cautious. The government needs to be supporting the clean energy industry any way that it can, because it creates jobs, creates the infrastructure we need to compete internationally, and hedges against the likely increase in the price of fossil fuels once the economy/demand pick up again.
And government needs to be giving these loans because banks aren’t lending. They still have bad debt on their books from foolish bets they made during the financial crisis, and they are still spooked by the bad economy. Taking bold bets is exactly what they are not doing right now, so our servant, the government needs to be making them.
We also need to wildly increase our spending on straight R&D for new energy solutions. We spend a modest few billion a year on energy R&D, compared to the $36 billion we spend on health R&D, or the $77 billion we spend on defense R&D; or to make an even more appropriate comparison, to the over $100 billion annually that China spends on energy research.
The comparison to health care is appropriate because investment in clean energy companies and technologies is a bit like investing in cancer research – you never know where the next breakthrough is going to be, so you need to spread a lot of money around on a lot of promising lines of research. If you try to be 100% sure that you’re investing in cancer research that is going to be successful, you won’t be investing enough.
Another good analogy is to when a baseball team drafts players. The most effective draft strategies tend to be those which draft a lot of players – it gives you the most opportunities to succeed. Note that it also gives you the most drafted players that fail as well.
Like cancer research, like baseball research, we can’t run from failure or be intimidated when a single idea doesn’t work. We have to keep fighting for more and bigger projects and research to support the green revolution which will help turn around this country.
These facts and comparisons need to be laid out directly to anyone who has questions about Solyndra or clean energy. Don’t back off and agree that the government needs to be more cautious in its clean energy spending – forcefully assert that it needs to be much bolder.
None of this is to say that Solyndra was that right choice for investment – it picked a technology that turned out to be a loser, and allegations that there was political favoritism in its selection should be thoroughly investigated.
But as in Baseball, talking about how a certain draft pick failed is not a valid argument for not drafting players. A certain amount of failure is inevitable when you have big goals. Success in every gamble is both impossible and not to be expected – if we don’t have a healthy amoung of failure, then we’re just not trying hard enough.