Silicon Valley in the Internet age has not made for great presidential photo ops. The Valley’s computer-chip factories were off-shored decades ago and (Google excepted) the software giants that supplanted hardware companies just didn’t have the same pizzazz — T-shirted geeks writing code can’t compete with guys and gals in bunny suits tending big futuristic machines.
The rise of green tech has changed all that. The Valley is back in the business of building stuff — solar panels, electric cars, fuel cells, and various energy efficient widgets and gadgets.
And so when President Obama’s helicopter landed Wednesday morning at Solyndra, a solar module maker, a television-ready tableau awaited — a huge American flag hung in an unfinished factory, shiny high-tech thin-film solar panels were on display and workers in hard hats mingled with an audience of some 200 engineers, scientists, venture capitalists, and California’s patron saint of green tech PR events, Governor Arnold Schwarzenegger.
Photo and caption: The White House
“We’ve got to go back to making things. We’ve got to go back to exports. We’ve got to go back to innovation,” said Obama on Wednesday in Fremont as Solyndra employees snapped photos with their iPhones.
“The true engine of economic growth will always be companies like Solyndra, will always be America’s businesses,” he continued. “But that doesn’t mean the government can just sit on the sidelines. Government still has the responsibility to help create the conditions in which students can gain an education so they can work at Solyndra, and entrepreneurs can get financing so they can start a company, and new industries can take hold.”
It’s an apt choice of words, for the fortunes of green tech startups like Solyndra have become entwined with the government as the Obama administration attempts to jumpstart a transition to a clean energy economy. The sprawling solar module plant we’re standing in — its construction is employing 3,000 workers — is being financed thanks in large part to a $535 million loan guarantee the Department of Energy granted to Solyndra last year.
A few months later, the startup filed for an initial public offering. The extensive vetting of Solyndra that the federal government performed before issuing the loan guarantee bolstered the company’s IPO (though Solyndra’s cash burn rate led auditors to question its viability).
“This facility would not have been possible in the current financial climate without that loan,” Kelly Truman, a Solyndra senior vice president, told me as the presidential podium was dismantled and construction workers returned to their jobs. “In terms of our business, having the Department of Energy give us this loan has certainly given us some credibility because of the scrutiny. We went through a year of due diligence. Imagine the most conservative bank in the world looking you over.”
The federal stimulus package’s 30 percent cash tax incentive for buyers of rooftop photovoltaic systems like those made by Solyndra has also helped keep the solar industry growing at a rapid clip through the Great Recession.
“But we’ve still got more work to do, and that’s why I’m going to keep fighting to pass comprehensive energy and climate legislation in Washington,” said the president, who called climate change “a threat to our way of life.”
Maybe it was the luxury of being 3,000 miles away from Washington, D.C. surrounded by apostles of an alternative energy future while the grim reality of the fossil fuel present hung over his head, but Obama spoke more bluntly than usual.
“We all know the price we pay as a country as a result of how we produce and use — and, yes, waste — energy today,” he said. “And the spill in the Gulf, which is just heartbreaking, only underscores the necessity of seeking alternative fuel sources … With the increased risks, the increased costs, it gives you a sense of where we’re going. We’re not going to be able to sustain this kind of fossil fuel use.”
A few miles up the road from Solyndra sits the empty hulk of the New United Motors Manufacturing Inc. plant. The now-defunct joint venture between General Motors and Toyota was California’s only auto manufacturing plant when the last Corolla rolled off the line in April. Its closing idled some 5,000 workers.
Last week, Tesla Motors, the Silicon Valley electric carmaker, announced it was buying the NUMMI factory, tapping a $465 million federal loan guarantee to close the deal. Tesla will build its Model S battery-powered sedan at the plant and has a commitment, but no solid deal, to produce electric cars with Toyota, potentially putting about a thousand autoworkers back on the line.
“This is only the beginning,” Obama said, referring to the Tesla deal. “We’re investing in advanced battery technologies to power plug-in hybrid cars. In fact, today in Tennessee there’s a groundbreaking for an advanced battery manufacturing facility that will generate hundreds of jobs. And it was made possible by loans through the Department of Energy, as well as tax credits and grants to increase demand for these vehicles.”
No surprise that Obama focused on the green jobs created by the federal largesse. But in the long run, that investment will help cutting edge technologies to scale.
Solyndra emerged from stealth mode less than two years ago, having raised an initial $600 million and secured $1.2 billion in orders for its copper-indium-gallium-selenide solar cells. CIGS cells can essentially be printed on flexible materials or glass without using expensive silicon. While such solar cells are less efficient at converting sunlight into electricity, production costs are expected to be significantly lower than making traditional silicon-based modules.
Co-founded by chief executive Chris Gronet, a veteran of chip equipment maker Applied Materials, Solyndra’s innovation is to coat long glass tubes with CIGS solar cells. Conventional rooftop solar panels must be tilted to absorb direct sunlight because they aren’t as efficient at producing electricity from diffuse light. But the round Solyndra module collects sunlight from all angles, including rays reflected from rooftops. That allows the modules, 40 to a panel, to sit flat and packed tightly together on commercial rooftops, maximizing the amount of space for power production.
While some commentators have questioned whether the DOE loan to Solyndra should have been directed at competitors with lower costs, there’s no doubt that the company is a contender in an ever competitive global market.
“There are factories like this being built in China, factories like this being built in Germany,” said Obama. “Nobody is playing for second place. These countries recognize that the nation that leads the clean energy economy is likely to lead the global economy. And if we fail to recognize that same imperative, we risk falling behind. We risk falling behind.”