Solyndra was the first domino. This latest bankruptcy will take with it maybe $50 million or maybe $100 million. The bankruptcy lawyers will hammer out a settlement.
The U.S. government had put up a $2.1 billion loan guarantee. We will not know for years how much money in the hole the latest solar energy company was.
What is a loan guarantee? It is better known as co-signing. In the language of the King James Version, it is surety, as in “sure loss.” The Book of Proverbs repeatedly warns against this practice.
Loan guarantees by the federal government are often said to cost the government nothing. Then comes a bankruptcy. The defenders say nothing. No one notices. The political fanfare and high-fives that were visible at the beginning of the process become entombment silent.
A long story on this boondoggle was posted on the Zero Hedge site. The anonymous “Tyler Durden” reports that “the company which proudly held the rights to the world’s largest solar power project, the hilariously named Solar Trust of America (“STA”), filed for bankruptcy.”
The original press release on this turkey promised that there would be 1,000 permanent jobs created, plus “7,500 indirect jobs in related industries throughout the United States, and more than 200 long-term operational jobs at the facility itself. It will play a key role in stimulating the American economy.”
The bankruptcy lawyers will do very well.
This is an ongoing soap opera.
As Bloomberg notes: “The company joins Energy Conversion Devices Inc., a U.S. solar manufacturer that suspended production last year; LSP Energy LP, the owner of a natural-gas-fired power plant in Mississippi; Ener1 Inc., maker of lithium-ion batteries for plug-in electric cars; solar-panel maker Solyndra LLC; and energy storage company Beacon Power Corp. (BCONQ) in bankruptcy.”
Here is a section from the original press release from the Department of Emergy’s head honcho, Stephen Chu.
“Loan guarantees play an important role in facilitating the development and deployment of innovative technologies at massive scope and scale. Continued investments like this project make solar power more efficient and cost competitive while creating thousands of jobs and strengthening the economy.”
Then there was the original statement from Gov. Jerry “Forever” Brown. (He was governor 35 years ago. His father was governor before him, when I was in high school there.) “California is the national leader in clean energy, and our great state is poised to become the world leader in renewable energy generation. I commend President Obama and Secretary Chu for making another major investment in California.”
YouTube has preserved the press conference. Think of it as a government-guaranteed gravestone.
This is standard stuff. It will not end until Washington’s checks bounce. Think of it as one more footnote in an ongoing book written by the disciples of Ludwig von Mises: He Told You So.