Tag Archives: Solyndra

OK, You Want To Talk About Solyndra?

OK, Karl Rove and his anonymous super-pac donors want to slam the Obama administration for “picking winners and losers” in the energy sector, and to do so by citing Solyndra and Evergreen.  First, there’s a little problem with the Evergreen part of the attack:

“But in 2002, three weeks into Governor Mitt Romney’s term, Evergreen Solar received $2.5 million from the Romney administration for a “major expansion and to cover operating losses as it tried to become profitable,” according to a February article in Politico. The investment was part of a broader program in which the Romney administration gave millions in subsidies to multiple other companies, Politico reported.” [WaPo]

Thus much for the “picking winners/losers” line.  And there’s a bit of an issue with the Solyndra example too, for those who don’t let ideology get in the way of their economics.   To summarize in entirely too few words, Solyndra had a very good product, but one which because of the nature of its design had limited use.  The company might have made it in a niche market for commercial rooftop installations, BUT …

“The Chinese government is investing in solar production, which has led to a burst in production that has boosted supplies and forced down product prices worldwide.  The price of panels has tumbled more than 40 percent in a year, Zweibel said, a drop that followed price declines in 2009.”  [NYT]

The Chinese were also doing a little something else:

“While some believe China benefits from lower labor costs, Arnold (Mitsubishi) said, “in fact much of manufacturing of solar modules is automated. Really the reason that countries like China are able to sell product at lower cost is they have cheaper access to capital,” because of government investments.” [NYT] (emphasis added)

That’s right. While the Americans were squabbling about whether or not to help capitalize solar energy component and system manufacturing, the Chinese government was pouring capital resources into their own sector.

Unsurprisingly, capitalism (or at least Who Had the Capital) worked; Chinese production soared and American companies with less capital available and parsimonious assistance from the government were left in the lurch.

But, all is not lost.  The attack ads forget to mention that there have been some winners in the American alternative energy sector.

The Coalition for American Solar Manufacturing lists 212 firms with 17,241 employees. [CASM]   Keeping 17,000 people off the unemployment rosters is fine, and we ought to note that First Solar has gotten some nice reviews by the stock pickers:

“While most of its competitors are losing money and have negative EPS numbers, First Solar is still profitable. At around 26 bucks a share, the stock has a current price to sales ratio of .83 and an expected year-over-year revenue growth rate north of 8%. Nearly all of its competitors have negative growth rates.

For fiscal year 2011, First solar reported negative GAAP earnings per share of ($0.45), but when accounting for write-offs and special charges, the company actually earned $6.00 per share. The resulting P/E ratio at this normalized earnings rate is around 5, giving it a very attractive .7 PEG ratio.

Finally, First Solar had sales in 2011 of $2.7 billion, surpassing most of its competitors. Only Suntech had higher sales volume at $3.1 billion. Furthermore, Suntech, along with LDK and Yingli, are Chinese companies that receive huge incentives from the government of that country. There are negotiations taking place between the U.S. and China to level the playing field by removing those subsidies, which can only benefit First Solar.”  [Seeking Alpha]

There are some reasons for concern in the solar energy sector, not the least of which includes European “austerity” measures which will mean lower subsidies for their installations.   Headwinds and all the corporate leaders of First Solar aren’t all that pleased with the Rovian castigation of them as losers:

“It’s surprising a candidate that claims to support U.S. economic growth would criticize a great American success story like First Solar,” said Ted Meyer, vice president of global corporate communications for the company, in a statement. “First Solar has proven that an American company can compete and win in renewable energy globally, and our success supports almost 10,000 American jobs, more than $1 billion in U.S. purchasing, tens of millions of dollars in exports, and record-setting innovation that reduces pollution and enhances U.S. energy security.” [Phoenix BizJournal]

The management of Ecotality wasn’t thrilled with the Rove ad either:

Officials with Ecotality said the ad presented a number inaccuracies with its operations, which has received numerous federal grants over the years particularly associated with electric vehicle charging infrastructure. Much of its work on that front is being done in Phoenix, where the company once had its headquarters and where it still houses its North American operations. [Phoenix BizJournal]

Getting down to specifics, the Rove ad shows a dramatic down arrow for First Solar stock, which isn’t quite the whole story — Now who would have thought that? Shares of First Solar have never dropped to $4.00.  “Shares of the solar company were trading Tuesday at $14.49, up 16 cents, or 1.1%, which is above both a 52-week and all-time low of $13.21. ” [TheStreet] Then, Seeking Alpha reported that some institutional fund and hedge fund manager weren’t seeing enough “growth” in semiconductor sector stocks and we see a bit of selling?  The stock is now selling at $12.60. [FSLR]

Not seeing “sufficient growth” and “going out of business” are two entirely different things.  Wall Street wants instant gratification.  Main Street needs, and will get, more affordable solar and alternative energy in the long run. There are millions of jobs to be created in alternative energy technologies, the question is Where Will They Be?  We can take the ‘day-trader’ Rovian view that that which doesn’t bestow instant gratification for players in the stock markets isn’t really part of our overall economic policy, and it’s OK for the manufacturing jobs to be created in China — or, we can take a longer view that (1) the alternative energy sector is a future source of energy independence and economic advancement, and (2) that the alternative energy sector should be advanced right here in the good old U.S.A.

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Filed under 2012 election, energy, energy policy, Romney

Quick Picks: Bishops To Square One on Contraception

Bishops to Square One:  The US Conference of Catholic Bishops is pleased to announce their “Fortnight to Freedom,” June 21 to July 4, described by the Catholic News Agency, as follows:

“The initiative was created in response to several moves by the Obama administration that are threatening the Church’s religious freedom. The most well-known action is the Health and Human Services mandate that requires employers to cover birth control and other services that Catholics and other believers find morally objectionable.”

Now, what was that old line the Bishops used to find so objectionable, could it have been “They want to hang their religions around other people’s necks?”

Tax dollars are going out the back door to private schools.  This may not be what the Alliance for School Choice had in mind:

“While the scholarship programs have helped many children whose parents would have to scrimp or work several jobs to send them to private schools, the money has also been used to attract star football players, expand the payrolls of the nonprofit scholarship groups and spread the theology of creationism, interviews and documents show. Even some private school parents and administrators have questioned whether the programs are a charade.”  [NYT]

How many didn’t believe the programs were a charade in the first place?

Solyndra and Lobbyists in Romney’s Bundle?  If an article included  “Solyndra, lobbyists, fundraising, and Romney” would you click over and read it? Would it surprise anyone that Romney has not released the names of any of his bundlers?  We could guess we’d find the list in the stack with his tax returns?

The Not Debt Crisis?  Next time some one tells you that the national debt is Crushing the Nation!!!  Ask why then have Treasuries remained low after a $35 Billion 2 yr. sale. “The securities drew a yield of 0.300 percent…”  [Bloomberg]

Meanwhile back with the “Job Craters” — JPMorganChase is being sued by employees whose retirement funds were hit by the bank’s Big At Least $3B Blunder. “The defendants were accused of violating their duties to 401(k) and other retirement plan participants by including company stock as an investment option, hiding the stock’s risk, and failing to move participants to safer choices.” [Reuters]   And about their former risk manager… there were red flags. [Reuters]

Infrastructure Anyone: The Chinese say yes.  Reuters reports:

The pace of investment in the likes of roads, bridges and real estate is running at its weakest in nearly a decade, April data showed, suggesting the world’s second-biggest economy is heading for a sixth straight quarter of slowing growth.

To provide some support the government had asked for project proposals by the end of June, even for those initially earmarked for the end of the year, said the China Securities Journal, one of the country’s top financial papers.

Citing government sources, the article said Beijing did not rule out bringing forward next year’s projects, if it thought more investments would be needed to stimulate the economy.

Meanwhile, the American Energy and Infrastructure Act  stalled in the U.S. House of Representatives. [ASCE] There is a House-Senate Committee moving on the topic in fits and starts. [VTD]

Flowing Foreclosure money?  Want to see what your state has done with settlement funds from the Big Five Banks?  Pro Publica has the information in a convenient chart.

Yucca Mountain is Still Dead.  [Las Vegas Sun]

Nevada unemployment rate drops below 12% for the first time in 3 years.  [NNBureau]

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Filed under Economy, education, energy, energy policy, financial regulation, GOP fundraising, Infrastructure, national debt, Nevada economy, Politics, Romney, women, Women's Issues, Womens' Rights, Yucca Mountain