The Department of Energy's loan guarantee program has already had two significant failures in the solar industry, the best known being Solyndra. Now a third company, San Jose's SoloPower, seems to be following in Solyndra's footsteps and threatening to leave taxpayers on the hook for millions more.
Last August, as Solyndra was going bankrupt, the Department of Energy issued a loan guarantee in the amount of $197 million to help SoloPower manufacture their thin-film solar power product. Like Solyndra, SoloPower has a nice-looking product. Its panels are thin and flexible and don't require heavy brackets to mount on a roof. And like Solyndra, the company's plans to expand were welcomed by politicians excited about the promise of hundreds of new jobs.
But as was the case with Solyndra, SoloPower's product advantages don't necessarily mean the company will survive stiff competition from China. Industry analyst Andrew Soare of Lux Research tells Fox News that China can still undercut US manufacturers by 30 percent, making it difficult to see how SoloPower can compete in the marketplace. It's this ability to undercut price that doomed Solyndra and Abound, another failed solar power company with a government-backed loan.
William Yeatman of the Competitive Enterprise Institute says of SoloPower, "It looks like it will fail for the same reasons as Solyndra." If it does, taxpayers will once again be on the hook. So far, the stimulus-funded DOE loan program has lost $600 million on solar company bankruptcies.
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