I really just hate to gloat, but… I kinda’ called this one.
Late last summer, at about the same time as the failed federally-backed solar company Solyndra was in its death throes, the Obama administration decided to go full steam ahead with its loan guarantee program anyway, approving a $197 million loan to oh-so-promising startup SoloPower. On top of that, the company received a total of $58 million in various tax incentives from Oregon and Portland, where they located their first major factory. Pretty sweet leg-up for an industry President Obama is constantly telling us is “on the rise,” no?
Womp. Solopower announced today that there going to have to do some business restructuring, including layoffs — and although they didn’t announce an exact number, it doesn’t look like things are going quite according to plan for them. Via Forbes:
The company issued a short statement about the plan after The Oregonian reported last night that the Silicon Valley startup is in trouble. The venture-backed company is laying off employees, and top executives have left the company recently, the newspaper reported.
SoloPower declined to disclose how many people it’s letting go or where the layoffs will take place.
“The restructuring includes a workforce reduction designed to trim costs and address market conditions as the company transitions from an R&D focus to commercial manufacturing and sales,” the company said in a statement.
SoloPower now joins a long line of solar equipment manufacturers worldwide who have struggled mightily to stay in business in the past two years. A glut of solar panels has caused prices to crash and forced dozens of manufacturers to either file for bankruptcies, idle production lines or scratch new factory plans. The impact of this imbalance of supply and demand has affected everyone from industry stalwarts such as First Solar and SunPower to startups such as Solyndra and Abound Solar.
President Obama is fond of iterating that we simply must continue to “invest” in order to keep pace with China on the green-energy frontier, but I am mystified as to why we’re using taxpayer money to so determinedly chase after an international industry that is nothing short of a mess of overcapacity (largely due to so much government interference in the free market! Who on earth could’ve seen that coming?).
As I’ve argued before, all of the federal government’s attempts to forcibly engineer the substance and direction of the energy market, by subsidizing industries that cannot compete by their lonesome, is actually more of a disservice to the future green energy — intentional market distortion is hardly the best way to encourage long-term price efficiency, especially when it comes at the expense of throwing us further into national debt and discouraging the type of robustly prosperous economy that best engenders innovation and progress.