Did the White House Screw Up Big Time by Rushing Loan Guarantees to a Solar Energy Company?

Photo: Simon Owler/Copyright (c) 2008 by Simon Owler. All rights reserved.

It looks as if the White House has a scandal on its hands, involving the mysterious Solyndra. While the tale might be more fascinating if Solyndra were a lady and not a solar-energy company, bear with us. It could have major policy implications! (Please bear with us?)

Two years ago, Joe Biden announced that the federal government would guarantee loans of $500 million for the company. It was the first deal to go through under the administration's plan to aggressively back the creation of green jobs as part of the economic stimulus package. Solyndra — touted back then as being "shovel-ready" — has now declared bankruptcy, and it seems that the government — in its eagerness to have something to announce — may have rushed to ink the deal with Solyndra before doing its full due diligence. A House subcommittee is investigating the deal. The Obama administration has emphasized that the Bush White House was planning to approve federal loans for the company, but Republicans are still making a great deal of political hay out of this failed deal, since, after all, it was the new administration that pulled the trigger prematurely.

Thanks to the stink now attached to Solyndra, there's the danger of a bad odor spreading over the whole energy-loan-guarantee program, whether deserved or not: Solyndra failed, said the administration's own executive director of energy loan programs, partly because the market for solar panels was flooded with cheaper models from Europe and China. That's the sort of big-picture problem that would lend credence to anyone who cared to make the argument that the whole enterprise is a poor use of federal money — and there are plenty of people eager to make that case.

Republicans Suggest White House Rushed Solar Company’s Loans [NYT]
Five myths about the Solyndra collapse [Wonkblog/WaPo]