Solar Tribune

Restructuring Officer: Solyndra provided accurate information to DOE


According to a new report, Solyndra, the failed solar firm that received a $535 million DOE loan guarantee, provided the government accurate financial information before its bankruptcy.

R. Todd Neilson, the chief restructuring officer, and currently a director at Berkeley Research Group, authored a report filed March 27 in the U.S. Bankruptcy Court in Wilmington, Delaware.

After reviewing submitted documents and communications between the DOE and Solyndra, Nielson concluded that “the DOE had sufficient information to understand the risks and challenges associated with the guarantee…and make an informed decision as to the ongoing financial condition of Solyndra.”

Further, “all of the funds drawn under the DOE Loan Guarantee were spent in accordance with the relevant loan documents,” Solyndra submitted “materially correct” financial data, and that “no material funds were diverted from their original intended use.”

Finding Fault

The report supported the claim that price pressures played a pivotal role in the firm’s failure. When Solyndra entered the market, the average sale price per watt (ASP) was $3.30, but by 2011 the ASP had dropped to about $1. “This rapid drop in ASP was probably the single greatest contributor to Solyndra’s failure,” said Neilson.

Neilson attributed this drop, for the most part, to China’s “aggressive” entry into the market, thanks to “subsidized funds from the Chinese government.”

Photo Credit: Solyndra

“Panel manufacturers using polysilicon were able to reduce the cost and price of their panels substantially,” Neilson said. Solyndra’s product was based on thin-film technology.

“Unfortunately Solyndra’s total costs of production, including materials, did not experience a commensurate reduction, which was devastating.”

To stay in the market, Solyndra had to drop the price, essentially operating at a loss. But Solyndra could not “rapidly adapt to changing market conditions,” the report said.

Neilson also noted the negative impact of the European debt crisis, which slowed growth in demand for solar panels and forced the government to reduce support for the industry.

Between 2009 and 2011, the European market accounted for 60 percent of Solyndra’s sales. The reduction of feed-in-tariffs, coupled with the falling ASP, had a “serious effect.”

If the ASP had stabilized, and government subsidies remained, “it is possible that Solyndra might have continued its operations and ultimately, may have become a successful company.”

“Given its unique technology, the company may have had a significant impact on the solar industry.”

Ongoing Investigation

Neilson’s report, however, did not refer to the Congressional investigation into whether approval and restructuring of Solyndra’s loan guarantee was politically motivated, nor did it comment on the pending federal criminal inquiry by the U.S. Attorney’s Office in San Francisco and the Justice Department.

“I have no intention of involving myself in political discussions why this was done, or whether it should have been done,” Neilson told Fortune.

The report comes hot on the heels of a March 20 Oversight and Government Reform Committee hearing, where Energy Secretary Steven Chu answered questions regarding the DOE loan guarantee program.

According to POLITICO, Chu told reporters that “After hundreds of thousands of pages of documents sent over, there’s not any whiff that [Solyndra] was a politically influenced decision. That’s true of all the loans.”

Meanwhile, Republicans on the case have indicated that perhaps their investigation may not confirm allegations, including that the White House aided George Kaiser by securing the loan guarantee. A donor to President Obama’s 2008 election campaign, Kaiser had also invested in Solyndra.

“Is there a criminal activity? Perhaps not,” Oversight and Government Reform Committee Chairman Darrell Issa (R-CA) told POLITICO. “Is there a political influence and connections? Perhaps not. Did they bend the rules for an agenda, an agenda not covered within the statute? Absolutely.”

Representative Jim Jordan (R-OH) told Environment & Energy Daily that the Republican pressure on the White House is essentially part of a campaign strategy to get a Republican President elected this fall.

“Ultimately, we’ll stop it on Election Day, hopefully,” he said. “And bringing attention to these things helps the voters and citizens of the country make the kind of decision that I hope helps them as they evaluate who they are going to vote for in November.”

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