July 20, 2012 12:49 AM UTC

Abound Solar: Chinese, Risk-Averse Obama Administration Killed Us

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• by: Colorado Pols

Congressional hearings today into the fate of Colorado-based Abound Solar, which declared bankruptcy despite a loan guarantee from the Department of Energy, turned interesting–if perhaps not useful to Republicans presiding over them? FOX 31’s WIll Holden reports:

Abound Solar said it was doomed by Chinese companies receiving government subsidies that far outweighed the support it was receiving from the U.S. government…

Thomas Tiller, Abound’s former chairman, told Congress the Chinese government provided about $35 billion in subsidies to Chinese solar companies. That, he said, resulted in a production growth that outpaced demand and pushed down the price for panels by more than 50 percent over the course of one year. [Pols emphasis]

“Such a severe market change made it difficult for Abound and others to survive,” Tiller told a House of Representatives oversight committee.

Reuters continues in a more in-depth story:

Prior to filing for bankruptcy, Abound received about $70 million of a $400 million loan guaranteed by the U.S. Energy Department.

The drop in the solar panel price was bigger than the Energy Department and other experts expected at the time the Abound loan was finalized, David Frantz, acting executive director of the department’s loan program, said in prepared testimony.

The decline in polysilicon costs made Abound’s cadmium telluride thin-film panels unprofitable, Frantz said. To protect taxpayers, the department stopped its funding in August 2011 when Abound began missing agreed financial milestones. [Pols emphasis]

Remember that the goal in the GOP’s investigation of DOE loan guarantees is to implicate the Obama administration in either negligent, or worse, politically-motivated decisionmaking in the distribution of loan guarantees for renewable energy development–a program that originated in the GOP-passed Energy Policy Act of 2005, albeit expanded by the 2009 stimulus bill.

But the truth is, as testimony from Abound executives showed today, the Department of Energy stopped backing Abound before these loan guarantees became publicly controversial in September of 2011. It makes sense that by this time DOE would have been cutting underperforming investments because of Solyndra’s problems, we don’t claim to know for sure. But combine this with the Chinese government’s massive subsidies to its own solar industry, and resulting below-cost Chinese solar panels dumped on the U.S. market, and it becomes awfully hard to pin malfeasance on the Obama administration for Abound Solar going under. Scott Tipton said of these loan guarantees, “it has to be done very judiciously.” Well, here you go.

If anything, if we’re serious about solar, maybe we should have kept Abound’s line of credit open like the Chinese did? That’s a debate, safe to say, we won’t be having this election year.